When you file for a Chapter 7 bankruptcy, you may be able to keep your credit cards, but there are a few things to keep in mind. If overspending contributed to your financial situation, it may not be wise to keep your credit card. However, there are many cases where you may want to do so. For example, if an emergency comes up or if you need to book a hotel. You may find yourself wanting to have a credit card, even if you don’t plan on using it very often.
Zero Balance Credit Cards
If you have open credit cards with a zero balance at the time that you file bankruptcy, you are not required to list it among your debts. Because of this, you will not have to notify the credit card company of your filing for bankruptcy – although they will likely still be notified. While they may not close your credit card, they could very well raise your rates.
Reaffirming Credit Card Debt
When you file for bankruptcy, you may have credit cards that still have a balance on them. Typically, credit card companies will let you reaffirm the balance and keep the card to enter into a new agreement.
Reaffirming credit card debt must be done with a lot of thought in mind, however. Once you reaffirm that debt, it will not be discharged. You will still owe that balance and it could continue to contribute to your overall financial burden.
If you have a card with a very low balance, however, reaffirming the debt might make sense. In the end, the creditors will decide whether or not they will allow you to reaffirm your debt.
Credit Cards After Bankruptcy
It’s usually best to discharge all credit card debt during bankruptcy to get your financial situation straight. If you need a credit card after you file, options do exist. For example, you can apply for a secured credit card or have a cosigner on an account. Once you’ve spent a good chunk of time making payments on time, you may be eligible to apply for a regular credit card.
If you are having problems making your minimum payments for your credit cards – and other debts – it’s a good idea to talk to an experienced bankruptcy lawyer in Waterbury, CT. They can help shed light on your options and help you determine if filing for bankruptcy is right for you.
Thanks to The Law Offices of Ronald I. Chorches for their insight into bankruptcy law and how to keep your credit cards when filing for bankruptcy.