Do I Have to be Current on My Bills to File Bankruptcy?

by Wendell Sherk, Missouri Bankruptcy Attorney

September 24, 2009

A regular question we hear from folks considering bankruptcy comes in two flavors:

  • Do I have to be current on my credit cards/bills in order to file bankruptcy?
  • How far behind do I have to be to file bankruptcy?

The simple answer is that you need to be in debt to consider bankruptcy but where you are in your payment cycle usually doesn’t matter much.  If you’re thinking about bankruptcy, you are probably broke enough to need bankruptcy.

If you want to use Chapter 13 to catch up missed payments on a home or a car, it’s important to get the case filed before you actually lose those things to a foreclosure or repossession sale.  But you do not have to be “behind” or “current” on your debt generally in order to qualify for bankruptcy.

Keep in mind that bankruptcy is different than the “debt settlement” programs which often claim you must have more than a specific amount of debt and that you need to be in default in order to work with them.

The main reason they say this appears to be that the credit card lenders aren’t likely to work with you if you are current — why would they, if you are paying them and they seem to have no risk of loss?  And your debt needs to be large enough that the debt settlement company’s fees don’t look too bad in relation (in my opinion).

And if debt collectors are telling you that you cannot file bankruptcy until you pay them to get current, think very carefully who is giving you legal advice here.  The people you owe money to are advising you when you are entitled to pursue your rights against them.

No matter how nice or reasonable they sound, they don’t work for you — they work against you. Get your own lawyer. And if you are getting debt collection calls, get one soon.

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I have been a bankruptcy attorney since 1989. Our firm represents consumers filing bankruptcy almost exclusively. I have represented bankruptcy trustees as well as creditors. If you live in Eastern Missouri, visit our website, send an e-mail or give us a call (314) 781-3400. Our website: STLBankruptcy.com

Last modified: May 7, 2014