The Short Answer
Whether to keep paying your debts before filing bankruptcy depends entirely on what kind of debt it is and what you want to accomplish. Keep paying secured debts on property you want to keep — your mortgage and car loan — and never stop paying child support or alimony under any circumstances. For credit cards, medical bills, and other unsecured debts you plan to discharge, you can generally stop making payments once you've decided to file. The period between your decision to file and your actual filing date is one of the most consequential stretches of any bankruptcy case — the right moves during that window can make your case much smoother.
If you’ve decided — or are strongly considering — filing for bankruptcy, one of the most practical questions you’ll face is whether to keep paying your debts in the meantime. The answer depends on the type of debt, who you owe, and what you want to accomplish.
General framework:
- Keep paying secured debts if you want to keep the collateral (mortgage, car loan)
- Keep paying domestic support obligations (child support, alimony) — always
- You can stop paying unsecured debts you intend to discharge (credit cards, medical bills, personal loans)
- Do not pay back family members or close friends before filing — the trustee can recover it
- Do not run up credit card balances or take cash advances before filing
Debts You Should Keep Paying
Secured Debts on Property You Want to Keep
A secured debt is backed by collateral — the lender has a legal right to the property if you don’t pay. The most common examples are your mortgage and your car loan. If you want to keep the house or the vehicle, you need to stay current on these payments.
In Chapter 7, if you stop paying a secured debt and fall behind, the lender can seek relief from the automatic stay and pursue the collateral even while your case is pending. If you want to keep the property, you typically need to sign a reaffirmation agreement and be current or close to current.
In Chapter 13, the repayment plan can cure mortgage arrears over time, but you must continue making ongoing mortgage payments throughout the case. Falling behind on the ongoing payment can give the lender grounds to seek relief from the stay. The same applies to car loans if you are keeping the vehicle.
Bottom line: If you want to keep the house or car, keep making those payments.
Domestic Support Obligations
Child support and alimony are not dischargeable in bankruptcy under 11 U.S.C. § 523(a)(5). If you stop paying them, you will still owe them after your case closes. Domestic support obligations are also not stayed by the automatic stay — the other party can continue to collect regardless of your bankruptcy filing.
Never stop paying child support or alimony because you are filing bankruptcy. It does not help you, and it will likely result in enforcement actions.
Debts You Can Generally Stop Paying
If you have decided that bankruptcy is your path forward, there is little financial benefit to continuing to make minimum payments on unsecured debts you plan to discharge — credit cards, medical bills, personal loans, utility balances. These debts will be eliminated in a successful bankruptcy case regardless of whether you paid them last month or not.
Many people continue paying these out of habit or a sense of obligation, but if bankruptcy is coming anyway, those dollars are often better saved for your attorney fees, the filing fee, or essential living expenses. Your attorney can give you specific guidance on when to stop based on the timing of your filing.
One important caveat: be thoughtful about how you stop. Stopping payments abruptly across many accounts at once — especially if you’ve been paying the minimum — will trigger collection calls and may result in lawsuits from some creditors. That is not necessarily a reason to keep paying, but it is something to plan for.
The Preference Rule: Why Paying the Right Creditors Can Backfire
Paying certain creditors more than others before you file can create a problem. Under 11 U.S.C. § 547, the bankruptcy trustee has the power to “avoid” — recover — payments you made to creditors before filing if those payments gave that creditor more than they would have received in the bankruptcy. These are called preferential transfers.
The 90-Day Rule for Regular Creditors
For most creditors — a credit card company, a medical provider, a bank — the trustee can look back 90 days before your bankruptcy filing. If you paid one of these creditors a significant amount in that window while not paying others, the trustee can sue that creditor to recover the money and distribute it more evenly among all creditors.
This does not mean you cannot make any payments during the 90 days before filing. Routine minimum payments are generally fine. The concern is large, non-routine payments to specific creditors.
The One-Year Rule for Insiders
The lookback period is much longer when the creditor is an “insider” — a family member, a close friend, a business partner, or someone else with a personal relationship to you. Under § 547, the trustee can recover preferential payments to insiders made up to one year before your filing date.
This catches many people off guard. If you repaid a loan from your parents or a sibling in the year before filing — even if you had genuinely borrowed that money and were doing the right thing by paying it back — the trustee can sue your family member to recover it. Your family member would then stand in line as just another unsecured creditor.
Do not repay personal loans to family or close friends in the year before you file.
Fraudulent Transfer Rules: Luxury Goods and Cash Advances
The Bankruptcy Code specifically addresses creditors who try to make debt non-dischargeable by arguing you borrowed money knowing you would not repay it. Under 11 U.S.C. § 523(a)(2)(C), there are two specific presumptions:
- Luxury goods or services totaling more than $800 charged to a single creditor within 90 days before filing are presumed non-dischargeable
- Cash advances totaling more than $1,100 from a single creditor within 70 days before filing are presumed non-dischargeable
Beyond these specific presumptions, using credit cards after deciding to file — even for ordinary purchases — can give a creditor grounds to object to discharge of that specific debt, arguing you used credit fraudulently. Stop using credit cards as soon as you have made the decision to file.
What About Secured Debts on Property You Plan to Surrender?
If you are planning to surrender property — walk away from the house, give back the car — there is generally no reason to continue making payments on that loan. The purpose of those payments was to maintain your right to keep the collateral. If you are surrendering it anyway, the payments accomplish little.
Stopping payments on property you intend to surrender will likely trigger collection calls and may result in the lender accelerating the loan. But once your case is filed, the automatic stay stops most of that activity, and the surrender of the collateral handles the underlying debt. Talk to your attorney about the timing of when to stop these payments relative to your planned filing date.
When to Talk to a Bankruptcy Attorney
The period between deciding to file and actually filing is one of the most consequential stretches in any bankruptcy case. Mistakes made during this window — paying the wrong people, using credit cards, transferring property — can complicate or even jeopardize your discharge.
If you are thinking about filing bankruptcy in North Carolina, the right time to call is before you make major financial moves — not after. An attorney can tell you:
- Which debts you can safely stop paying now
- Whether any recent payments might create preference issues
- How quickly you can file and what you need to do first
- Whether Chapter 7 or Chapter 13 is the better fit for your situation
Duncan Law offers a free consultation — there’s no charge to ask. Schedule a free consultation with Damon Duncan.
Frequently Asked Questions
No — not all bills. Keep paying secured debts on property you want to keep (mortgage, car loan) and domestic support obligations (child support, alimony). For unsecured debts you plan to discharge — credit cards, medical bills, personal loans — you can generally stop, though your attorney can advise on timing based on your specific situation.
Yes, missed payments affect your credit score. But if you have already decided to file bankruptcy, your credit will be affected by the bankruptcy itself regardless. Most people in this situation find that the credit impact of stopping pre-bankruptcy payments is not a significant additional concern. Rebuilding credit after bankruptcy is possible and begins once the case is resolved.
Paying off a specific credit card to keep it open is risky. It may constitute a preferential transfer recoverable by the trustee if it was a significant payment within 90 days of filing. Additionally, you are required to list all creditors in your bankruptcy petition — you cannot simply omit one to keep the account.
Tell your attorney immediately and disclose the full amount, timing, and circumstances. Depending on how much you paid and when, the trustee may have the ability to recover those funds from your family member. Your attorney needs to know about it — concealing it is far worse than disclosing it.
If you want to keep the house, yes. In Chapter 7, keeping your home generally requires staying current on the mortgage and signing a reaffirmation agreement with the lender. If you are behind, Chapter 13 is typically a better fit because it provides a mechanism to cure arrears. If you plan to surrender the house, you can stop making payments — discuss the timing with your attorney.
Using credit cards for everyday necessities is generally lower risk than charging luxury items, but it is still not advisable once you have decided to file. Any credit card use after you have made that decision can potentially give a creditor grounds to argue the charges were made without intent to repay. The safest approach is to stop using credit cards as soon as you decide bankruptcy is your path forward.
Yes. The trustee reviews payments made within 90 days before filing for signs of preferential treatment — large or irregular payments to specific creditors while leaving others unpaid. Routine minimum payments are generally not a concern. A significant lump-sum payoff of one account while other debts went unpaid is the kind of payment that may attract scrutiny.
Yes. If you want to keep your vehicle in Chapter 7, you need to stay current on the loan and reaffirm the debt. In Chapter 13, your ongoing car payment continues throughout the case, while arrears can sometimes be addressed through the plan. Falling behind on the car payment — in either chapter — puts the vehicle at risk.
No. There is no requirement to be current on your debts before filing. In fact, most people who file are behind on many of their bills. What matters is your current financial situation, your income relative to the means test, and the types of debt you have — not whether you are up to date on payments.
Key Takeaways
- Keep paying secured debts (mortgage, car loan) on property you want to keep
- Never stop paying child support or alimony — bankruptcy cannot discharge them
- You can stop minimum payments on credit cards and medical bills you plan to discharge
- Do not repay personal loans to family or friends within one year of filing — the trustee can recover it
- Stop using credit cards the moment you decide to file, even for groceries or gas
- Large or irregular payments to specific creditors within 90 days of filing may be clawed back by the trustee
Attorney Insight
The mistake that surprises clients most is paying back a family member before filing. I understand the instinct — you borrowed money from your parents, you're doing the right thing by paying it back, and it feels completely different from paying a credit card company. But the trustee doesn't see it that way. If you repaid a family member or close friend within a year of filing, the trustee has the power to sue that person to get the money back. Your family member then becomes just another unsecured creditor. Every week I have a client who paid back mom or a sibling right before calling us, thinking they were being responsible. Tell your attorney about every payment you've made to anyone you know personally — before you file, not after.
