Most people who file for bankruptcy do so as a result of overwhelming credit card debt. It is an unfortunate outcome of a sluggish economy that many Americans have to resort to use of credit cards to pay every day expenses. And when you are not able to pay the card balances in full, interest adds up quickly and can cause your total amount due to spiral out of control. If you file bankruptcy though, you can either eliminate or at least reduce your credit card debt. Once you no longer have to juggle your salary to stay on top of mounting credit card bills, you will have more money on hand to cover your expenses. But what do you do if you get in a financial bind after you file bankruptcy? Can you still use a credit card to take care of an unexpected emergency home repair or medical bill?
It is unlikely you will be able to use an existing credit card after you file bankruptcy, and here is why:
• When you file your case most card issuers stop allowing charges to be made.
• If your card issuer does not stop your ability to use their card, chances are your credit line will be frozen and any purchase you try to make will be denied as an over the limit attempt.
This is usually the case for cards you had before you filed a bankruptcy case, but there is nothing to stop you from applying for a new credit card once your bankruptcy case is finished. In fact, many companies offer cards to people fresh out of bankruptcy as a way to start rebuilding your credit. But be careful, the rates are often higher than what you paid before, and if you don’t watch your spending you can end up right back where you started. The best thing you can do after getting out of bankruptcy is to make a budget and a plan to stick to that budget. In fact, part of the bankruptcy process includes a requirement that everyone who files a case participate in a credit counseling program. This program is designed to bring awareness to financial issues, and prepare you for how to live on what you earn without resorting to taking on debt to pay for things you need. We know this can be hard, and are here to help.
For more information about bankruptcy and your credit cards, contact us at www.DsouzaLegalGroup.com.