One of the hardest things for a person filing for bankruptcy is giving up their credit cards. A common question that many people ask their bankruptcy attorney when filing is, can I keep one of my credit cards as long as I can keep paying? It’s pretty crazy to ask that. Isn’t that what got you into all your trouble anyway? People don’t understand how they can survive without credit. I remember when I was a kid my parents used to save for household items like a TV. It wasn’t until the 1970s that plastic became popular. This idea that you could have it now and pay for it later, when you really think about it, is pretty stupid. In most cases, by the time you pay for it, the item is worthless and you are probably no longer using it. Thinking of it that way, if you had saved the money to buy the item, you might change your mind and not buy it because it wasn’t as important as you thought it would be. Most purchases made with credit cards are impulsive.
After a person files for bankruptcy, the court sends notices to a list of all of the debtor’s creditors. That is why the bankruptcy attorney takes the time to create a creditor matrix that is filed with the bankruptcy petition. This is the list the bankruptcy court uses to make the mailing. Once all creditors are notified, in most cases, they close the accounts. First of all, the debtor should not collect anything if he is in the process of filing for bankruptcy. That goes back to the point, even if the debtor wanted to try to keep a credit card, it wouldn’t matter because he would close the account anyway.
In a Chapter 7 bankruptcy, the debtor will generally get their discharge between 4 and 6 months after filing. With a Chapter 13 bankruptcy, the debtor will need to complete a 3-5 year repayment plan before the court will discharge them. Another question that a bankruptcy lawyer hears quite often is, how long after my bankruptcy discharge will I be able to get another credit card? Again, it’s almost as if debtors just don’t get it. Credit is what ruined their lives and it’s the first thing they’re worried about getting back.
Lately, many people after filing bankruptcy have been telling stories of how they are getting pre-approved credit card offers in the mail. This person just went through bankruptcy and the letter will say that his credit is in good standing and that he qualifies for a new credit card. That’s totally surprising because most post-bankruptcy debtors are typically bombarded with offers for secured credit cards immediately after discharge. It makes you wonder if they didn’t know about the bankruptcy or don’t care. Creditors know that after a Chapter 7 bankruptcy, most debtors are debt free or nearly debt free with just a car loan or mortgage.
Those two elements hardly count because they are necessary to live. They also know that this person cannot file for bankruptcy again for eight years. This gives them a good chance that they can be paid. Many of these offers have extremely high fees and interest rates, so the debtor should be very careful before signing on the dotted line. After going through the stress of filing for bankruptcy, a debtor should be careful about getting back into debt quickly and should consult their bankruptcy attorney before deciding to do so.