The Allmand Law Firm, PLLC Difference

Unlike most bankruptcy firms in the Dallas / Fort-Worth area, Allmand Law Firm, PLLC spends the time to understand the complete financial picture for every one of our clients. We provide resources, tools and advice to address the unique needs of North Texans.

Stop Automatic Payments Before You File Bankruptcy

Posted By admin || 23-Feb-2009

Bankruptcy and Automatic Payments

Modern banking almost requires automatic banking for nearly every expense, cell phone plans, cable television bills, utilities and even rent (sometimes); but using automatic deductions from your bank account or credit card during a bankruptcy can reek havoc on your bankruptcy case.

Problems With Automatic Deductions

For example, if a debtor has automatic deductions from his/her bank account for a utility bill with a credit card as a backup, the debtor could unknowingly end up with a new charge on a credit card that is in bankruptcy. The consequences could be devastating for the debtor in bankruptcy. If a debtor makes a charge (even an automatic one) a bankruptcy trustee may suspect fraud on the part of the debtor and dismiss the case. Even in a case where a charge is not made to a credit card in bankruptcy, automatic deductions from a bank account may cause one creditor to be paid (out of order) before another.

Considering Bankruptcy? Cancel All Automatic Payments

During bankruptcy there are certain creditors who have priority when it comes to being paid, with automatic payments that order could be disrupted. That's why if you're considering bankruptcy, you must cancel all automatic payments to your bank account, credit cards and all post-dated checks before you file you file for bankruptcy. If you would like some assistance or not quite sure if bankruptcy is right for you don't hesitate to give us a call or fill out our contact form to request a free consultation.

Categories: Credit and Bankruptcy
Blog Home