Credit Cards Use During a Bankruptcy
Can Credit cards be used during bankruptcy? This is a common question I receive.
You cannot use credit cards during a bankruptcy. Until your bankruptcy is closed completely, you should not incur additional debt. The purpose of bankruptcy is to reduce or eliminate your debt. If you are in bankruptcy and start incurring more debt, you may find your spending behaviors continue. You want to establish good credit. Also, any debts incurred after the day you file, you are obligated to pay.
The day you file your bankruptcy, those debts included in your bankruptcy petition, are either wiped out (Chapter 7) or reduced (Chapter 13). A Chapter 7 bankruptcy usually is completed in 90 days; therefore, it will not be long before you can apply for credit again. A Chapter 13 Bankruptcy usually has a 3-5 year Plan. Yet many times, during the 3-5 years, you are able to apply for credit.
Most creditors cancel all credit cards/lines/charging privileges upon the filing of a bankruptcy. Credit lines with zero balances are also cancelled. Even if you are current on your credit lines/cards, they are cancelled by your creditor.
You can pay in cash methods, check and/or debit.
Now you are on your way to only spending what you can afford for the time being.
The good news is:
- You will be able to get credit again.
- During a Chapter 13 Bankruptcy (which is usually a 3-5 year Plan), you may be offered credit.
- There are credit cards similar to debit cards which can be used.
- I have received letters (which are sent to me while my clients are in bankruptcy) offering the following:
Your credit recovers quickly after or during bankruptcy. Getting rid of debts through bankruptcy allows you to obtain the credit you need in the future.
If you are behind in your payments, you already have a poor credit rating. After filing bankruptcy, your credit score immediately improves.
I answer NO to the following question:
Can Credit Cards Be Used During Bankruptcy?
I am here to help you get out of debt so that you are on your way to a great financial future. Call Me Today: (201) 446-5904; set up a free bankruptcy consultation. I provide bankruptcy legal services to: