I pay all of my credit cards on time and none of my cards have gone to collection, but I can't afford to pay all of the minimum payments anymore and I can't negotiate the balances down. Do I need to stop payment on the cards and go to collection before I file for Chapter 7?
Absolutely not. There is no requirement in bankruptcy that you are behind on payments before you can file. Sometimes the fact you are current is evidence that you have the ability to pay your debts as they become due and therefore may not be a good candidate for bankruptcy. However, in my experience, this is not always the case. Most people want to avoid bankruptcy like the plague and so they cut back on necessities like adequate food, clothing and dental/medical expenses. In effect people pay the bills first, then their rent, utilities food etc. This is backwards - you have to take care of the basic needs of yourself and your family first. Only after those are met should you be paying the creditors. Make no mistake about it - VISA does not care if you have food on the table or not.
I have filed hundreds of cases for people who are contractually current on all obligations at the time of their bankruptcy case. I am sure there is a capable attorney near you who would advise the same.
No. You do not need to stop payments on your cards before filing for Chapter 7. As it takes a little bit of time to gather all the necessary information to prepare the forms to file a bankruptcy case, I am sometimes asked by potential clients whether they should stop payments while gathering the information for filing. My answer will depend on the circumstances of the particular case, but often, after I determine that the client qualifies for a chapter 7 case and the client has committed to filing the case, I will recommend him or her to stop payments on the credit cards so that he or she can devote the money for important personal needs or for the costs of the bankruptcy filing itself.