How a Personal Bankruptcy Will Affect Your Ability to Own a Credit Card
Unmanageable credit card debt is a common cause of many personal bankruptcy petitions. It’s rarely the result of fraud, but typically tied to the loss of a job, an unexpected illness or a divorce. Credit card debt may be discharged in Chapter 7, provided you qualify, and may be reorganized through Chapter 13. What is the impact of a bankruptcy filing on your ability to retain and use a credit card, or to qualify for a credit card in the future?
Can You File for Bankruptcy and Keep a Credit Card?
Though the law does not prohibit owning a credit card after filing a bankruptcy petition, as a practical matter, you probably won’t have access to one. As a general rule, when a credit card company learns that one of its customers has filed for bankruptcy protection, it will terminate all privileges associated with the card. That’s because the filing of the bankruptcy petition will cancel all your contracts. Once your credit card company realizes that it no longer has an enforceable contract with you, it won’t want to risk any further losses.
Note that, even if you have no balance on a credit card, it will likely be canceled by the provider, as it must be listed in your bankruptcy filing, regardless of the balance.
Can You Get a New Credit Card after Filing for Bankruptcy Protection?
Yes. In fact, you may be surprised at how soon you’ll qualify for a new credit card or some other type of consumer financing. You can typically expect a new credit card offer within a few months. There are, though, a number of reasons why you’ll be more attractive to a credit card company after filing for bankruptcy protection:
- Because of the debt you’ve discharged, you should have more discretionary income
- Studies show that most people who have filed for bankruptcy are less likely to engage in frivolous spending afterward
- You won’t be able to file for bankruptcy again for a significant period of time, so the credit card company has little risk of a repeat discharge
Contact an Experienced Rockwall, TX Bankruptcy Attorney
Make certain a Chapter 7 filing will provide the fresh start you need. At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County and the surrounding counties.
