Is it smart to pay the settlement when currently getting ready to file for bankruptcy?

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Is it smart to pay the settlement when currently getting ready to file for bankruptcy?

I am gathering the funds and starting the initial processes to hire a bankruptcy lawyer. Today I found I had a pending case on an installment loan but they were willing to settle out of court for less than a third of the cost of the balance due. They told me they want to send out the court papers in 2 days, a Sunday, and I would not have time to hire the bankruptcy attorney. The total amount to settle is only $404. Is it smart to pay the settlement when currently getting ready to file for bankruptcy?

Asked on August 3, 2012 under Bankruptcy Law, Michigan

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

From what you have written, if you want to save $404.00 with respect to the settlement you have written about, I suggest that you wait to pay the $404.00 until after you file for bankruptcy protection. Once you file for bankruptcy protection. Most likely if you get a discharge in your bankruptcy, you will not owe the $404.00.

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

From what you have written, if you want to save $404.00 with respect to the settlement you have written about, I suggest that you wait to pay the $404.00 until after you file for bankruptcy protection. Once you file for bankruptcy protection. Most likely if you get a discharge in your bankruptcy, you will not owe the $404.00.


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