Can I Keep A Credit Card When I File Bankruptcy?
Losing your credit cards when you file bankruptcy can be a scary thing, especially if you’ve been making ends meet by using them. I’m often asked by my clients if there is anyway for them to keep “just one” of their credit cards for emergencies. Like most lawyer answers, this one requires more than a simple yes or no.
When we file your petition, we have to include all of your debts, which means all of your credit cards. If you fail to include all of your debts, you risk not having a debt discharged (eliminated) in your bankruptcy. On the other hand, if the credit card issuer agrees, you might be able to keep a credit card.
Yes, You Can Reaffirm A Credit Card. No, You Should Not Reaffirm A Credit Card
It is possible for you to “reaffirm” a credit card debt when you file bankruptcy. Reaffirming a debt, whether it’s a car loan, mortgage, or credit card, means that the debt won’t be discharged. After the court closes your case, you’ll still be legally liable for any debt you’ve reaffirmed. If you don’t pay the credit card, the lender will sue you and put you right back where you were before you filed. Generally, reaffirmation is reserved for secured debts, usually car loans.
Keep in mind that I have never advised a client to reaffirm a credit card debt, and I can’t envision a situation in which I would. The purpose of bankruptcy is to get a fresh start with a clean slate that is debt free. Reaffirming a debt is completely contrary to that idea. Bankruptcy involves some sacrifice and the opportunity to learn to live within a budget. The better course is to wait for a year or so before you try and get any new credit and live that year on a strictly cash basis. You can start an emergency fund with the money you’re no longer spending on credit card debt.
Even if you can’t wait a year, you’ll get offers for credit cards faster than you can imagine. I have a client who bought a new car on the day his bankruptcy case closed. I was so flabbergasted, I forgot to ask what kind of interest rate he was getting
Talk To An Experienced Bankruptcy Attorney About Reaffirming A Credit Card In Bankruptcy
If you have questions about the bankruptcy process, we hope you’ll come in for a free, no-obligation consultation with an experienced bankruptcy attorney. You can schedule a consultation online or call 303.331.3403 to set up a time that is convenient for you.
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