2018’s Best Bankruptcy Credit Cards

What happens to a credit card that you get soon before filing bankruptcy?

Last decade, Congress imposed new restrictions on the ability to discharge credit card debt in bankruptcy. Debtors who increase credit card spending with bankruptcy on the horizon will find it difficult to discharge the debt, especially if the debt is incurred for non-essential, "luxury goods or services" (a phrase in the Bankruptcy Code used in connection with credit card debt). It is still possible to discharge credit card debt, but not if the debtor is viewed as someone who tried "to game" the system by incurring credit card debt with the hope of avoiding payment in a bankruptcy proceeding.

What happens to a credit card that you get soon before filing bankruptcy?

Most companies will cancel your card once you file for bankruptcy.

Can you get a credit card during bankruptcy? Is there a difference between Ch. 7 and Ch. 13?

You can. Bankruptcy discharges debts incurred prior to the filing for bankruptcy. It does not wipe out debts incurred while a debtor is in bankruptcy. For this reason, card companies are more willing to issue a card after a bankruptcy petition is filed. Not all companies will issue cards to those in bankruptcy, but there is generally an increase in availability. Credit card companies often view people who have completed their bankruptcy proceedings as better credit risks than they were before the bankruptcy petition was filed. The bankruptcy proceeding reduced the other debt that the person had incurred, so there is a bit less competition for available earnings. Also, if a person used Chapter 7 to discharge debts, he or she cannot file a Chapter 7 case for another 8 years. This means that the credit card company can extend credit without having to worry about seeing that debt discharged in a Chapter 7 case.

How do your credit card options change after bankruptcy proceedings are complete?

While a bankruptcy filing means that the customer cannot file for Chapter 7 again for a number of years, it does indicate that the person has a history of borrowing more than they can repay. For this reason, the offers that the person may receive may have low limits, high interest rates, or both. For some, they may be forced to procure a secured credit card.

Is there a difference between secured and unsecured credit cards when it comes to bankruptcy?

With a secured card, the customer has to usually put down a deposit with the card issuer equal to the limit on the card. The card issuer will offset the deposit against any unpaid charges on the card. The customer will only get back what, if anything, is left. With the unsecured card, the card issuer is just an unsecured creditor, and will likely receive little payment on the outstanding debts.

Can you keep a credit card during bankruptcy if it doesn’t have a balance when you file?

If the person is not discharging debt associated with that card, the credit card company may decide to allow the customer to keep the card. Still, the card issuer usually has the right to terminate the card if it wants to.

What happens to a credit card that you get soon before filing bankruptcy?

Any debts that you take out prior to filing bankruptcy are part of the bankruptcy case. If you owe any money on the credit card, that amount will be a debt that generally will be discharged in the bankruptcy case, meaning you will no longer owe that amount after the bankruptcy case ends.

Can you get a credit card during bankruptcy? Is there a difference between Ch. 7 and Ch. 13?

If you file Chapter 7, you can get a credit card after you file bankruptcy, during the bankruptcy case. In fact, credit card companies likely will send you credit card applications after you file. If you file Chapter 13, credit card companies will also likely send you credit card applications after you file. However, Chapter 13 cases involve a repayment plan that lasts three to five years. It generally is not advisable to take out new credit during those years. If you decide that you need to get a new credit card, you will need to ask the trustee overseeing the case and the bankruptcy judge.

How do your credit card options change after bankruptcy proceedings are complete?

Your credit card options generally change a little after the bankruptcy case is complete. Depending on your credit score when you filed bankruptcy, the interest rate and other terms of credit cards offered to you may change. If your credit score was rather high before you filed, the interest rate offered my increase. But if your credit score was rather low before you filed, you may find that the interest rate is the same as offered prior to your filing, or even that it is slightly lower.

Can you keep a credit card during bankruptcy if it doesn’t have a balance when you file?

You cannot keep a credit card during bankruptcy. All your debts incurred prior to the bankruptcy generally will be discharged at the end of the case. This includes credit cards with zero balances. And as a debtor, you are under a legal duty to disclose all your debts to the bankruptcy court when you file. But this should not worry you. Credit card companies generally will be eager to extend you credit after your case ends.

Can you keep a credit card during bankruptcy if it doesn’t have a balance when you file?

Generally, you can’t keep credit card accounts during bankruptcy; active accounts, even with a zero balance, need to be listed in bankruptcy paperwork. It may be possible to obtain a secured card during bankruptcy, depending on the circumstances. After bankruptcy proceedings are complete, it should be possible to open credit cards, both unsecured and secured, although they will probably come with high interest rates and fees. Secured credit cards will probably have better interest rates than unsecured after a bankruptcy.

What happens to a credit card that you get soon before filing bankruptcy?

If there is a balance, the debt will be discharged in the bankruptcy and the card will no longer be useable.

Can you get a credit card during bankruptcy? Is there a difference between Ch. 7 and Ch. 13?

Upon filing only the prepetition debt will be in the bankruptcy, so its possible to get a new credit card, but unlikely since you will need to re-establish decent credit. No difference, both are on your credit report for 10 years.

How do your credit card options change after bankruptcy proceedings are complete?

You have a chance to re-establish a better credit score

Is there a difference between secured and unsecured credit cards when it comes to bankruptcy?

Not for the debtor, only the creditors, since one has collateral and the other does not.

Can you keep a credit card during bankruptcy if it doesn't have a balance when you file?

Yes, since it's a contract and the debtor can choose to keep the credit card, but only if it has no balance.

What happens to a credit card that you get soon before filing bankruptcy?

When you file for bankruptcy, your credit card company will receive a notice of your bankruptcy status and will close your card. The existing credit card balance considered as unsecured debts will be discharged if you file either Chapter 7 or Chapter 13. However, there is a difference between Ch. 7 and Ch. 13. Under Chapter 7, your credit card debt will be discharged fully when your case is approved by the court. By contrast, under Chapter 13, known as "a court-mandated repayment plan", you should make payments on your credit card debt continuously during the bankruptcy. If you complete your repayment plan, any remaining credit card debts could be discharged.

Can you get a credit card during bankruptcy? Is there a difference between Ch. 7 and Ch. 13?

You could apply for a new credit card after going through bankruptcy, but your application is likely to be rejected due to your poor credit score. In particular, you could apply for new credit cards during the Chapter 13 bankruptcy, but the chance is limited because you need an approval by court. Some individual trustees provide different guidelines to debtors who seek an approval for new credit card, you need to contact your trustees.

How do your credit card options change after bankruptcy proceedings are complete?

After bankruptcy, it is very difficult to get an approval for a new credit card due to your poor credit score. This is why rebuilding credit is very salient after bankruptcy. As a starting point, financial practitioners and credit counselors suggest that those who filed previously for bankruptcy apply for a secured credit card from a bank. In order to reestablish your credit score, the key plan of action is to make payments timely every month. Once you build a solid payment history, you will get an opportunity to obtain an unsecured credit card.

Can you keep a credit card during bankruptcy if it doesn't have a balance when you file?

In general, when you file for bankruptcy, you are required to list all of your creditors. If you have a zero-balance credit card in bankruptcy filings, you may not add it to your filing. However, most credit card issuers review your credit report regularly and they will likely close your account once they find your filing status. Further, omitting a creditor could be considered fraudulent in certain situations. Therefore, you may seek an appropriate advice from an agency with the Financial Counseling Association of America (FCAA) or the National Foundation for Credit Counseling (NFCC) before you file for bankruptcy.

What happens to a credit card that you get soon before filing bankruptcy?

The issuer may close your card, or raise the interest rate on your card, and/or lower your credit limit after you filed bankruptcy. Though unsecured credit remaining debt can be completely wiped out under Chapter 7 bankruptcy after the distribution of the proceed of the sale of your nonexempt property to your creditors, according to 11 USC 523 of the Bankruptcy Code, luxury charges of more than $500 within 90 days of filing for bankruptcy are presumed to be non-dischargeable.

Can you get a credit card during bankruptcy? Is there a difference between Ch. 7 and Ch. 13?

If you filed a Chapter 13 bankruptcy, you may find it relatively difficult to qualified for an unsecured card because you may still make payments on your existing debts; if you filed a chapter 7 bankruptcy, you may be still offered many pre-qualified credit card applications because your old debts were wiped out and banks know you can't file bankruptcy again for another 10 years and that reduces the chance of default. But be aware these credit card issuers may charge heavy application fees and monthly service fees in addition to higher APR.

How do your credit card options change after bankruptcy proceedings are complete?

Your options to get a credit card after filing for bankruptcy are limited. A bankruptcy filing on your credit reports will make credit approval harder. However there are several credit cards that have been specifically designed to help those with bad credit even post-bankruptcy applicants though these credit cards may come with stricter rules than others would.

If you don't qualify for an unsecured credit card, secured credit cards are a great option to rebuild your credit. Because the card is secured by your deposit, almost anyone can qualify for a secured card.

Is there a difference between secured and unsecured credit cards when it comes to bankruptcy?

Unsecured credit debt can be completely wiped under Chapter 7 bankruptcy. Under Chapter 13 bankruptcy, all or portion of unsecured credit card debt is required to be repaid back over three to five years. The issuer may close your unsecured card, or raise the interest rate on your card, and/or lower your credit limit after you filed bankruptcy. Since a secured credit card is secured by the deposit, bankruptcy has less effect on the secured credit cards.

Can you keep a credit card during bankruptcy if it doesn't have a balance when you file?

It is possible to keep a credit card during bankruptcy. If it doesn't have a balance, then you even don't have to list it with your other debts and you don't have to notify your credit card company of your bankruptcy filing. However your credit card company could cancel your card or potentially raise the interest rate on your future purchases if they find out about your situation.