Are you struggling to make ends meet financially? Is trying to cover all your bills and expenses becoming more and more challenging? If so, bankruptcy may be a smart solution.
However, if you are like some people, you have kept credit cards for emergencies and may wonder if you can keep these in the bankruptcy proceeding.
Keeping credit cards when filing for bankruptcy
When filing for bankruptcy, it is necessary to report all credit cards you have. This includes cards with a zero balance. Reporting these cards makes them part of the process, which means you can’t keep them.
The impact of bankruptcy on your credit report
Filing for bankruptcy will remain on your credit report for seven to 10 years – but you don’t have to wait this long to get a new credit card.
As time passes, credit cards will start being offered to you again. These offers typically start with secured cards since the risk is lower for the creditor. This is because secured credit cards are backed by the money you deposit onto the bank that is financing the card.
When you finally start receiving unsecured credit card offers again, the interest rates will likely be much higher than what you had before filing for bankruptcy. This is because the creditor views you as more of a risk. Once you establish a repayment history, the rates will likely go down.
For some, being unable to keep any credit cards may seem like a deal breaker. However, the benefits offered by bankruptcy are often enough to make this sacrifice worthwhile. If you’re considering bankruptcy, it may be time to learn more.