Do I Have to Be Behind on My Bills to Go Bankrupt? – Lys


“Dear Steve,

I’ve recently had a baby and im working part time. my monthly income is 400.00-550.00 a month. im having a hard time paying all my bills. my car payment is mostly all my income of 410.00 i have close to 20000.00 in credit card debt. i havent made my car payment for the month. when i spoke to my lender they told me that they cannot make any changes to the auto loan. im totally upside down on the auto loan 3-5k. im only making min payments on my credit cards. i have 4card that carry a balance of more than 5k.

Do you have to be behind on your bills to file for chapter7 bankruptcy? what are the req to file? if i do a voulntary surrender on my auto and i recive the bill for the difference of the auto loan and can not pay what happens next?


Dear Lys,

You do not need to be behind on bills to go bankrupt. This is called a “surprise bankruptcy” because by all appearances you are current on payments from your creditors point of view and then, surprise!

Find a local bankruptcy attorney you like. Schedule an appointment for a free bankruptcy consultation and go meet with them. It certainly sounds like bankruptcy is right for you.

The attorney will probably tell you to let the car lender have the car, sell it at auction and then send you a big bill. That debt will be included in your bankruptcy.

Please update me on your progress by

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P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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1 thought on “Do I Have to Be Behind on My Bills to Go Bankrupt? – Lys”

  1. Lys,

    Steve is correct, you don’t have to be behind on you bills to file bankruptcy.

    Regarding your car, you should inquire of your bankruptcy attorney what options you have under both Ch 7 and Ch 13. It may be possible to file Ch 13 and reduce the payments on your car, thus keeping your car. Ch 13 is a big commitment but generally provides a better set of options and has some flexibility in the event your income drops down the road.

    Best of Luck



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