Maybe you borrowed money from your grandfather. Maybe you have a personal reason that leads you to want to pay back all of your creditors even though you currently cannot. Maybe you have an outstanding bill with your favorite doctor and want to pay your bill, but you have to file bankruptcy. What can you do?
We get this question often from potential clients and the answer is easy – you can! Timing, however, is critical. When your case is filed, you agree under penalty of perjury that you have listed all of your creditors (anyone or any business you owe money to). So, grandpa and the doctor will be listed on your paperwork and will get notice of the bankruptcy filing. The “discharge” of your debts that the bankruptcy affords will eliminate your legal obligation to re-pay those debts. Nothing in the law, however, prohibits you from re-paying your debts, and certainly, your desire to do so is honorable. What the bankruptcy will do, however, is prevent grandpa or, more likely, the doctor, from ever trying to collect that money from you. They are not allowed to send you a bill for the amount that was owing when the bankruptcy was filed, and they cannot sue you for the bill, garnish your wages, put a lien on your home, etc.
What I generally advise my clients to do in this situation is to keep the lines of communication open. Call the doctor’s office and tell them (in your own words) that “my attorney said I have to list you in my bankruptcy because the law requires it, but I do want to still pay the bill.” Your doctor will be thrilled to hear this, as they are going to be paid money that you legally will not be required to repay.
Going forward from the filing of your case, you can repay any debts that you want to, but you won’t have creditors breathing down your neck, and you won’t have the threat of a lawsuit or garnishment looming from those pre-bankruptcy bills. You can pay whatever amount you can afford and whenever you want to do it without any pressure from the creditors.
Be sure that you do not pay friends or family members back money that you owe them prior to your case being filed. This is what bankruptcy law refers to as a “preference.” Doing so may lead to the recipient having to return the payment. Consult with one of our attorneys for more information.