Credit Cards After Bankruptcy
Credit Card Usage And Bankruptcy
Can you keep using your credit cards after filing for bankruptcy? The simple answer is no. You must stop using your credit cards immediately when it becomes clear to you that you are going to file for bankruptcy protection. Any charges you make within a certain period of time before filing your bankruptcy petition can be held to be not dischargeable which means you will have to pay for them. Usually this time period is 40 days for charges and 20 days for cash withdrawals. Not only might you not be able to discharge the debt, you might get a fraud notice placed in your credit file which will have a devastating effect on your attempt to get future credit.
Banks Share Information
Another thing you need to be aware of is that most large banks who issue credit cards have access to services which alert them when one of their cardholders file for bankruptcy. Once the card company receives such notice, your credit card accounts are closed immediately. If you look at your credit card agreement, you will find a provision there which says as much.
Exceptions Are Possible
It is possible, though hardly ever practicable, to enter into a reaffirmation agreement with a credit card company in which you agree to pay the full amount of the debt if the credit card company reinstates your account and charging privileges. You will have a better chance of doing this if you file a Chapter 13 rather than a Chapter 7 bankruptcy proceeding. Still, it is worth a try. The most important thing is that you avoid the embarrassing moment of having a merchant seize your card after you have filed bankruptcy but before you have notified your creditors of your action.
You do not want to be at dinner with that special someone and have the waiter return to you with your card cut in half and you do not have adequate cash to pay your bill.
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