Planning to File Bankruptcy: What Bills Can be Ignored?

Many things need to be taken into consideration when planning to file bankruptcy. One of them is does the debtor stop paying bills entirely? Or should they be selective about which ones they chose. There's never an exact answer as it depends on the individual situation. But in general there are some bills that can be put aside while paying others.

Most Commonly Ignored Bills

Debts that aren't secured by property are the safest ones to ignore. In the situation where the debtor is still paying something on their credit card bills, they can safely stop as a bankruptcy filing is just around the corner. The creditor will not be able to send the debt to collections, much less obtain a judgment, in that short of a time. Continuing to service debt is just throwing money away as there will be either a reorganization of it's payment or complete elimination.

Should a Debtor Ignore Secured Debt?

Again, it depends. In the case where a home is involved, it's best to keep paying the mortgage to have a better chance at keeping it through the bankruptcy. The mortgage itself can be renegotiated if necessary. Ultimately if the debtor wants to keep their home, they will reaffirm during the process. And if the debtor does not want to keep the house, then they can make the choice to stop paying and walk away from it.

Where there's a car with a loan payment on it, and that car is necessary for quality of life, do not stop payments. Most likely the debtor will not have to reaffirm the loan as long as they keep paying the note. As long as the intent is to keep the car and keep making payments, it's possible to leave the car out of filing entirely. Other options exist if the loan needs to be renegotiated for more favorable terms.

Utility Bills

Most will say to keep these out of the bankruptcy entirely and just keep paying them. Utilities are liable to close the old account and open a new one with the requirement of a hefty deposit. It's just easier to avoid the hassle for a necessity and not include them at all.

Legal Assistance

It's best to have a consultation with an experienced bankruptcy attorney. Both parties can sit down and go over the debtor's financial situation. From there the decisions can be made with certainty about which bills to pay and which ones to abandon.