Automatic payments are very common, whether they are for a vehicle, mortgage, credit cards, or personal loans. When you file a bankruptcy you will either be advised that your automatic payments will stop after filing or you should make sure to stop them prior to filing, this advice depends on the creditor.
If you have automatic payments for secured creditors, for example, a vehicle or home loan, your automatic payments will likely all stop after the creditor receives notice that you filed the bankruptcy. This is because all of your creditors, even on debt you want to keep, do not want to violate any of the laws in bankruptcy. If you notice your automatic payments shut down and you still intend to pay on the loan to keep the secured property, you should be able to mail or call in payments. Your attorney may be able to send a letter giving permission for automatic payments to continue as well. It will be up to the creditor if they will continue automatic payments though.
If you have automatic payments for unsecured creditors your attorney will advise you to make sure to have the automatic payments stop and to get verification in writing, if you can, from the creditor saying the payments will stop. The reason to do so is, because after filing, you won’t be paying on your unsecured debt anymore. Although, most unsecured creditors will stop automatic payments after they receive notice of the bankruptcy filing, some unsecured creditors will continue to take out payments until they hear from you.
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