How To File Bankruptcy On Credit Cards

Why Isnt A Credit Card Always A Creditor

A credit card isnt always a creditor because the bankruptcy code defines creditor as someone who has a claim for money against the debtor.

• If there is a balance on the card, then the credit card company has a claim for that balance, and is a creditor
• If there is no balance on the card, then the card company doesnt have a claim, and they are therefore not a creditor

So a card without a balance does not need to be listed in your bankruptcy, and the credit card company might decide to let you keep it open.

Is That Credit Card Right For The Post

Rebuilding your credit rating is an important first step after a bankruptcy discharge. One of the ways post-bankruptcy debtors rebuild their credit is by taking out a credit card but how do you know if the credit card is worth it or just another trap door leading to more debt? Below are few tips on how to choose the right credit card while rebuilding your credit after bankruptcy

Is the credit card issued by a major bank? You want a credit card that you can use just about anywhere and that will report your payments to one or more of the credit bureaus.

Does the credit card have a teaser rate or is the initial interest rate there to stay? One of the most common ploys of high interest rate credit cards is to get the debtor with a low teaser interest rate that skyrockets within a few months. Before you agree to taking on a credit card, read the fine print and find out what the true interest rate is.

Does the credit card have a grace period that allows you time to pay the balance without accruing interest? For post-bankruptcy debtors, having a grace period can help them avoid the slow slide into debt that landed them in bankruptcy in the first place. Smart post-bankruptcy debtors make sure that their credit card has a grace period with fair terms.

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How Accounts Appear On Your Credit Reports

Before filing for bankruptcy, you probably had bills you struggled to keep up with credit cards, medical debt and more.

When you include those accounts in a bankruptcy filing, theyll still be reported on your credit reports. Accounts discharged in bankruptcy can be reported as discharged or included in bankruptcy with a zero balance. Even though you owe $0 for them, theyll still appear on your reports. If you apply for credit, lenders may see this note when they check your reports, and they may deny your application.

But heres that good news we promised: Accounts included in a bankruptcy filing wont be reported as unpaid or past due anymore, and you may feel relief without those financial burdens.

Your credit scores will eventually start rebounding with those positive effects, Huynh says. Thats assuming, of course, you use credit responsibly from here on out.

Consequences Of Missing One Or More Credit Card Payments

After one missed payment, you will be charged a late payment fee up to $40. If you miss subsequent payments within a six-month period, youll be charged up to $40. This fee is added to your balance and starts accumulating interest based on your APR. Some card issuers will waive late payment fees for your first violation or if you contact them and explain why you failed to make a payment.

You will be charged interest on the purchases for the billing cycle, which is the case whenever you carry a balance meaning you fail to pay the full amount owed.

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In Too Deep To Recover From Credit Card Debt Theres Still Help

Perhaps youve been reading this and thinking, its too late for budgeting to help me. Are you already late on paying several accounts? Are you getting calls from creditors or collection agencies? Are there court judgements against you from creditors, or have your wages or bank account been garnished? These are all signs that you are insolvent and need a new financial start.

Can I Keep My Credit Card If I File For Chapter 7 Bankruptcy

Youll Get Credit Card Offers After Bankruptcy

I just had a client call with the same questions weve been asked a million times before Can I keep my credit card if I file for bankruptcy? Its a great question that unfortunately gets the typical lawyer answer. Itdepends. Unlike a lot of legal questions, however, this is one that can get mostly explained during a quick phone call. The following information usually answers my clients questions.

The simplest answer is that you can decide to keep one of your credit cards open if that credit card company lets you. It really comes down to the status of your credit card and which credit card company were talking about.

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Can You File Bankruptcy On Credit Cards

The simple answer is, Yes, you can file bankruptcy on credit cards. However, filing bankruptcy on credit cards is a bit more complicated. You need to determine if you qualify to file bankruptcy and under what chapter of bankruptcy you are eligible to file. You must also determine if filing bankruptcy is right for you. Some people who owe credit card debt might benefit more from a non-bankruptcy alternative for getting rid of credit card debt. Lets explore each of the options for getting rid of credit card debt in more detail.

The Best Credit Card For Avoiding A Credit Check: Opensky Secured Visa Card

Why? There is no credit check for the OpenSky, Secured Credit Visa, Card application process. Your refundable security deposit of $200 will determine your credit limit. This benefit is particularly attractive for those who are focused on credit rebuilding after bankruptcy. A hard credit check could negatively impact your credit.

For more information, read the OpenSky, Secured Credit Visa Card.

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Dont Stop Paying Your Credit Cards Until Youve Filed For Bankruptcy

Making credit card payments is, in most instances, like pouring money down the toilet if youre eligible to file for bankruptcy. Stopping your credit card payments may create needless harm if youre still uncertain or wont submit your case for a long time.

Also, before you cease making payments on your credit card debt, be sure you qualify for bankruptcy. Fees rapidly mount after you stop, and if you dont file, it may be challenging to bring your accounts up to date.

So make sure you pass the Chapter 7 means exam, which is needed to be eligible for Chapter 7. Otherwise, you may have to file for Chapter 13 bankruptcyand Chapter 13 eligibility isnt guaranteed. For many filers, funding a Chapter 13 repayment plan is too expensive.

Where Bankruptcy Doesnt Help

Bankruptcy does not necessarily erase all financial responsibilities.

It does not discharge the following types of debts and obligations:

• Loans obtained fraudulently
• Debts from personal injury while driving intoxicated

It also does not protect those who co-signed your debts. Your co-signer agreed to pay your loan if you didnt, or couldnt pay. When you declare bankruptcy, your co-signer still may be legally obligated to pay all or part of your loan.

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Philippine Airlines Will Retire 777s & A350s

As part of its reorganization plan, Philippine Airlines is planning on reducing the size of its fleet by roughly 21 aircraft, leaving the airline with 70 aircraft. Most significantly, Philippine Airlines intends to get rid of:

• Four of six Airbus A350-900s, which are an average of under three years old
• Four of 10 Boeing 777-300ERs, which are an average of just over seven years old
• An undisclosed number of Airbus A330-300s the airline has 15 of these in its fleet, which are an average of just over seven years old

A few thoughts, based on those wide body aircraft plans:

• The airline sure will have a varied wide body fleet, with two A350s, six 777s, and some number of A330s Im guessing this comes down to agreements the airline was able to reach with leasing companies
• Philippine Airlines flew A350s to London, New York, and Toronto, so odds are that the airline will have cut service to one or all of those destinations these routes have allegedly been losing money, with flights to the US west coast being more profitable
• Philippine Airlines new A350s feature a much improved business class product, so this is bad news for the carriers quest to become a better airline

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Should I Declare Bankruptcy Or Walk Away From My Debt

Defaulting on a loan and filing for bankruptcy are not opposite choices. In fact, Fleischman recommends defaulting on a loan before filing for bankruptcy. If you havent defaulted, it might indicate that you havent given yourself enough time to allow your financial situation to improve.

If you default, filing for bankruptcy can protect your assets from being seized by creditors. It can also protect you from having future wages or an inheritance garnished. Bankruptcy is useful not only for protecting what you have but also for protecting your future, Fleischman says.

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Do I Qualify To File A Chapter 7 Case

You must meet income requirements to qualify to file a Chapter 7 bankruptcy case. If your average income is below the median income for your state, you should qualify to file a Chapter 7 case. But if your income exceeds the state median income, you may want to talk to a bankruptcy attorney.

If your average income falls below the state median income, it means you pass whatâs called the Chapter 7 Means Test. If you pass the Means Test, you are typically eligible for a bankruptcy discharge under Chapter 7. But even if you fail the first section of the Means Test, you may still qualify to file a Chapter 7 case.

The second section of the Chapter 7 Means Test subtracts allowable expenses from your monthly income. The amount of money remaining after you subtract all allowable expenses is your disposable income. Individuals who don’t have disposable income or who have very low disposable income may still qualify to file a Chapter 7 bankruptcy case.

What happens if I donât pass the Chapter 7 Means Test?

If you don’t qualify for debt relief under Chapter 7, there are a couple of things to consider. You can try talking to a lawyer to make sure you donât qualify. If not, you might consider filing for Chapter 13.

In very few cases does a Chapter 13 debtor repay all their credit card debt. In most cases, the debtor pays a small percentage of their credit card debt to their creditors. Once the debtor completes the Chapter 13 plan, the remaining credit card debt is discharged.

What Are The Outcomes Of Filing For Bankruptcy

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When you file for bankruptcy, as mentioned earlier, it includes a stay of proceedings. This halts legal action by your creditors, the collecting calls and any garnishment of your wages by your employer for unsecured debts. Its important to note that secured creditors, such as your mortgage lender, still have the right to seize your assets, such as the family home, if you fall in arrears.)

After filing for bankruptcy, a note will remain on your for at least six years after the discharge date. Even with the bankruptcy on your credit report, you may still be able to obtain credit, depending on the lenders policy. Youll also most likely want to work closely with your trustee to take the necessary steps to rebuild your credit after bankruptcy.

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Filing Bankruptcy On Jointly Held Credit Cards

Filing bankruptcy jointly simply means that you and your spouse are both filing bankruptcy as a married couple. That way, it is likely that all your jointly held credit card debt can be discharged. There are pros and cons to doing this, and a skilled Missouri bankruptcy attorney can help you explore your options and choose the right path that is best for your unique situation. Of course, you can also file bankruptcy without your spouse if that turns out to be the most financially advantageous path forward.

To Avoid Actions That Might Hurt Your Case Contact Us For A Free Initial Consultation

Taking action early with the help of Balbus Law Firm will not only relieve the debilitating stress that comes with unmanageable debt, it will put you in the best position to file bankruptcy. Many of the problems discussed above can be fixed simply by waiting to file until the look-back periods have expired. Other methods to avoid the problems are also possible. We will assist you in planning the best time to file and the best way to deal with potential problems based on your particular situation.

For more information about what you should not do prior to filing in a free initial consultation, call 203-286-4121 or e-mail us.

Balbus Law Firm is a debt relief agency. We help people and businesses in New York and Connecticut file for bankruptcy relief under the Bankruptcy Code.

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Chapter 7 Bankruptcy And Credit Card Debt

When you file for Chapter 7, most of your debt can be discharged. However, Chapter 7 requires you to give up all of your non-exempt property. The trustee will sell the property and use the money to pay off creditors. Most credit card debt is viewed as non-priority, unsecured debt, so its discharged with Chapter 7. Tax debts and child support are two examples of priority debts, which cannot be discharged with Chapter 7 bankruptcy.

Although it doesnt make sense in most situations, its possible to file for Chapter 7 and reaffirm all debts except for credit card debt. In this situation, an individual is liable for reaffirmed debts when the bankruptcy is finished.

Restrictions On Obtaining Credit During Bankruptcy

Obtaining credit during bankruptcy can be challenging. If you file for a Chapter 7 bankruptcy, you can apply for credit as soon as the debt is discharged. With Chapter 13 bankruptcy, you will need to receive prior approval from the court or Chapter 13 trustee. Additionally, your plan payment must be current at the time of the request.

If you would like to get new credit during your Chapter 7 or 13 bankruptcy case, you should consult an experienced Cleveland bankruptcy attorney at Luftman, Heck & Associates. We will explain your situation to you and help you understand obtaining credit during bankruptcy.

Call us today at for a free consultation.

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Do I Have To List All My Credit Cards On The Bankruptcy Petition

When you file for Chapter 7 bankruptcy in Michigan you are required to list all your creditors on your petition. Whether or not you have to list a creditor depends on if there is currently a balance on that card. If you are in default or have a balance and making minimum payments you have to list them on the bankruptcy petition. Most credit card companies will cancel your credit card with them unless you reaffirm the debt.

Its a different story, however, if your account is open but paid off at the time of filing. An open account with no balance isnt considered a debt, and so you dont have to list them on the bankruptcy petition so that they receive notice. Some clients decide they want to pay off the balance on one of their credit cards. Either they like the bank that issued the card, theyre afraid of not being able to get a credit card after bankruptcy, or they dont consider that their main debt and so they want to pay it off.

What A Means Test Means

When you sought bankruptcy protection, Vanessa, the law was different. That was before 2005 when Congress created something called a means test. Basically, someone else appointed by the bankruptcy court studies your financial situation and decides if you even qualify for Chapter 7 or 13.

Bottom line: Thanks to the Bankruptcy Abuse Prevention and Consumer Protection Act , it is indeed harder to declare bankruptcy today than it was before 2005.

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Opensky Secured Visa Credit Card

Verdict: A bit more expensive to own than our other secured options, but it can still be a great tool for rebuilding credit.

Unlike other cards on this list, the OpenSky® Secured Visa® Credit Card does come with an annual fee of $35. However, there is no credit check to apply and you’ll start off with an initial credit line of $200 when you pay the refundable deposit. Unfortunately, this card doesn’t come with rewards and costs a bit more to own than the other cards on this list, but it can still be a great option when rebuilding your credit score.

The OpenSky® Secured Visa® Credit Card reports to the three major credit bureaus and can be a huge help in bringing up your credit score when you make your payments on time and in full each month.

• Rewards: No