Richfield, UT asked in Bankruptcy and Banking for Utah

Q: If I stop paying my Credit Cards because I know I'll be filing Chapter 7 in a few months. What do I do with extra cash?

For my unsecured debt, the minimum payments are $1200 a month. If I stop paying them because I plan to file what am i expected to do with the excess money. I, of course, will need some to live on and but will probably have $500 leftover. I image if I put that in my mattress it will need to be accounted for eventually. What If I pay extra on Student Loan or put it in a ROTH IRA? I want to play by the rules, but don't want to just throw money at debts that will be discharged anyway.

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3 Lawyer Answers

Cristina M. Lipan

  • Bankruptcy Lawyer
  • Brooklyn, NY

A: You can exempt certain assets. If you have enough exemptions to cover that extra cash it's not a problem what you do with it, it's yours. To be safe, just don't take too long to file your bankruptcy case so you don't accumulate so much.

Timothy Denison

  • Bankruptcy Lawyer
  • Louisville, KY

A: Use it to live on and claim an exemption for the balance.

Bruce Alexander Minnick agrees with this answer

Bruce Alexander Minnick

  • Business Law Lawyer
  • Tallahassee, FL

A: All of these important questions can only be answered by a bankruptcy lawyer hired BEFORE you attempt to file for bankruptcy.

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