In today’s economy, having a credit card is almost necessary in order to conduct financial transactions. For example, most rental car agencies require that the customer have a credit card to secure the rental. While you can pay for a hotel room with case, you often need a credit card to secure the reservation. While it may not be impossible to live without a credit card, it does make some financial transactions far more difficult. Therefore, many debtors want to know if they can keep a credit card if they file bankruptcy.
Reasons Why You Cannot and Should Not Keep a Credit Card After Bankruptcy
Some people believe they can just “keep a credit card” if they file bankruptcy by not listing that credit card in their bankruptcy schedules. However, it is against the law not to list all of your credit cards in your bankruptcy filing so “leaving one off” is not an option. Of course, you do not need to list credit card accounts that have a zero balance in your bankruptcy case; therefore, if you have a credit card with a very small balance (i.e. $150) that you pay in full prior to filing, you need not list that account in your bankruptcy.
Unfortunately, you are probably wasting your money by paying off the credit card to avoid listing it in the bankruptcy because the company will likely cancel the account when the bankruptcy notice is reported on your credit report. Most lenders cancel credit card accounts, even those with a zero balance, when the balance case is reported on the credit report.
What Options Do I Have to Get a New Credit Card?
For clients who are concerned about the need to keep a credit card after bankruptcy, they can apply for a new credit card after the bankruptcy case is closed. This is typically not very wise because a credit card company willing to give you a credit card will likely charge you the maximum percentage rate possible.
A better option is to apply for a secured credit card once your bankruptcy case has been closed. You place a deposit with the credit card company to secure the charges on the card. In most cases, you are charged a lower percentage rate but receive all of the benefits of having a credit card.
You are filing bankruptcy to relieve your credit card debt. While you may want to keep a credit card after bankruptcy, it is better to avoid credit if possible as you are working hard to recover from your debt problems. Once you are on stronger footing, you can begin to use the lessons learned from your debt management course to handle credit wisely.
Contact an Experienced Mount Holly Bankruptcy Attorney
Personal Approach, Professional Service, Affordable Payment Plans
The Law Office of Travis J. Richards, LLC is a full-service Mount Holly bankruptcy law firm focused on Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, debt consolidation, credit repair, tax liens, student loans and foreclosure. We represent clients in Burlington County and throughout South Jersey.
If you are experiencing financial problems due to debt, contact our office at 609-267-5297 to schedule your free consultation to discuss bankruptcy and non-bankruptcy alternatives. You may also use our convenient online contact form and one of our friendly, professional staff members will contact you to answer your bankruptcy questions and/or schedule a free consultation with Travis J. Richards.
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