Keeping a Card
Any cards that you owe money on at the time of bankruptcy must be filed as debt. Not filing a credit card you owe money on as debt is considered perjury and is a federal crime. Perjury, in connection with your case, can lead to denial of discharge of your debts. If your discharge is denied, the debts that could have been discharged in that case will not be allowed to be discharged in any subsequent bankruptcy.
However, if you do not owe anything on a time of bankruptcy, you will not be legally required to give the credit card company any notice of your bankruptcy status. You should be aware, however, that they may find out in other ways and cancel the card as a means of precaution.
Most companies will allow you to keep the card after bankruptcy if you agree to reaffirm the balance on the card and enter into a new agreement to be signed after the bankruptcy filing. Most creditors choose to allow this because the want to avoid discharge loss and want your future business.
Getting New Credit
Contrary to popular belief, an after bankruptcy credit card will not be impossible to get. A new credit card will probably be more expensive than it was before you filed bankruptcy and it may have lower limits, but it will be available. Secured cards are usually available after bankruptcy at lower rates than unsecured cards.
If you get a new credit card after filing bankruptcy, it will be extremely important for you to use the card cautiously and pay on time in order to establish better credit for your future. Before you decide to get another credit card, you should consider the role credit played in contributing to your bankruptcy the first time. You should also find out about current credit card rates and fees.
Rebuilding Your Finances
Bankruptcy credit card problems do not have to ruin your credit history for the rest of your life. Bankruptcy may be no more harmful to your credit history than the basic financial facts that lead to bankruptcy, and you may find it more useful to think about your net worth than about your ability to borrow money in the future.
Bankruptcy, if nothing else, makes all debt in the negative history unenforceable, which makes you a much better credit risk after bankruptcy than before it. Bankruptcy will not, however, erase the record of the debts you had, so you will want to make sure that discharge is shown on your credit report so that new creditors will know that there is no legal claim to that debt.
You may begin to regain your financial footing with actions such as joining a credit union, which may be a likely source for a car loan after bankruptcy. You can put the money you have been spending on credit card payments into a savings account, and have contributions to a savings or retirement plan automatically withdrawn from your paycheck. If you choose to get a new credit card, you should get just one, use it sparingly, and pay it off every month to avoid falling into the same situation you were in before bankruptcy.
The bottom line is that your bankruptcy credit card problems do not have to ruin your financial future if you take a realistic approach to being more careful and rebuilding your credit status.
By Kristin Cleveland