Zion Bankruptcy Attorney On Keeping A Credit Card After Filing Bankr...

The truth is that you are typically going to lose all of your credit cards and other credit when you file a Chapter 7 bankruptcy petition states Zion bankruptcy attorney.  You are required under the bankruptcy code to list all of the people that you owe money to.  Thus, even credit cards that you do not carry a balance on will often find out about your bankruptcy.  If you do not owe a balance, they do not need to be listed, however, those creditors subscribe to a service that will advise them about bankruptcy filings.  If you do owe money on a credit card, it must be listed and there is a pretty good chance or a very good chance rather that you are going to lose your credit privileges. 

In some instances, there are clients of mine who have contacted a credit card company after the case was filed and the credit card company agreed to allow the continuing use of that credit card.  However, this is the exception and not the rule.  You should not plan on keeping any of your credit cards when you file for bankruptcy.  You can, of course, apply for credit after your bankruptcy case is filed and you will have a lot of offers for credit although those offers sometimes come with high annual fees and high interest rates. 

People always worry about credit after bankruptcy.  What I suggest to these clients is that they worry about getting out of debt first, getting back on their feet and then once they are stabilized and once they are bringing in more money than they are spending per month, then you can look to a credit card.  However, I still encourage them to only use the credit card for the convenience of credit and not to carry a balance.  Getting a credit card after bankruptcy is easy.  It will help improve your credit score provided you use the card widely and provided you don’t run any balances. 

You can also get a secured card at any time after filing a bankruptcy.  A secured card is where you put a certain dollar amount in a banking institution and then that institution gives you credit privileges or charging privileges up to the amount or 1 1/2 times the amount that you put on account.  The good thing about a secured credit card is that you are spending your own money that you have on account and you are not falling into debt.  You are also going to be reported positively to the credit bureau so by having a secured card, you are actually increasing your credit score every month that you have good credit and no negative credit on that card. 

So yes, you will be able to get credit after bankruptcy but don’t plan on being able to keep any of your existing cards when you are going through the bankruptcy process.