Bankruptcy Basics

Can I Stop Paying my Bills Before I File Bankruptcy?

Bankruptcy in Georgia is meant to help get you out from under the burden of insurmountable bills, and we typically do not consider filing for bankruptcy until we truly cannot afford our bills any longer. Once you’ve made the decision to use bankruptcy go get a fresh start, it can be tempting to simply stop paying your bills. It may seem to make sense – you’re going to eliminate those bills anyways, why continue making payments towards them? But can you stop paying your bills if you’re going to file bankruptcy?

Continue Paying Your Bills Before Bankruptcy

The best thing you can do is speak to your attorney about your bills, and discuss which of them you can stop paying today. There may be certain bills that you can ignore, but there may also be ones that you absolutely want to keep paying. Be sure to discuss the bills listed below, as these can have significant consequences.

  • Your Mortgage and Car Loans – You will need to decide if you wish to keep your home or car after your bankruptcy. This can be done by reaffirming the debt, which means that you will continue paying off your debt, and essentially leave that loan out of your bankruptcy. You will be responsible for these debts during and after your bankruptcy, so you may need to keep making these payments.
  • Student Loans – Student Loan debt has become a common headache in Georgia. Check with your attorney to see if you have any way to discharge this debt  during your bankruptcy. Often, student loans cannot be discharged, which means you need to carefully consider how you handle them leading up to your bankruptcy. This brings us to our next category…
  • Any Debts that Can’t be Discharged – In addition to student loans, there are several other types of debt that cannot be discharged through personal bankruptcy in Georgia. It is important for you to understand which of your debts will be eliminated and which will not. If you stop making payments on a debt which will not be discharged, you’ll simply fall behind on another bill and be underwater again after your bankruptcy.
  • Rent on your home, Utilities, Etc – There are many bills in our everyday lives that we simply must pay. If you stop paying the gas bill, your heat turns off. If you stop paying your rent, you’re on the street. Consider the consequences before you decide to stop paying any of your bills.

    Can I Stop Paying Unsecured Debts before Bankruptcy?

    A debt is called unsecured if there are no assets that a lender can repossess if you stop making payments. Your car loan, for example, is secured by your car. If you stop making payments, the bank takes your car. Your credit card, on the other hand, has no such collateral. Other examples include personal loans and medical bills – if you stop making your payment, you do not stand to lose a piece of property. These are very common types of debt in Georgia, and they can often be our largest monthly bills. Given the lack of collateral, can you stop paying unsecured debts before your bankruptcy?

    It may be frustrating, but the best answer is that you need to speak to an attorney. The bankruptcy laws in Georgia are complex, and your personal situation is unique. When you meet with your bankruptcy attorney, bring a list of your bills, and all of the information you have about your debt. Working with your lawyer, you can come to a plan on what to do with each debt individually, given your income and any savings. Based on all of this, your attorney may recommend that you keep paying some or all of your unsecured loans.