When a person files for bankruptcy protection, their first consideration is what will happen to their possessions. From cars and homes to jewelry and credit cards, debtors wonder which property the trustee, the court and the judge will let them keep. The answer is complex where credit cards are concerned, and as with most parts of a bankruptcy filing, it depends on the case’s specific circumstances and the help of a Bankruptcy Attorney in Grand Rapids MI.
Keeping Credit Cards After Filing for Bankruptcy
Some debtors may be able to keep their credit cards, but only after careful consideration of certain factors:
* The balance carried on each card at filing time
* The preferences of each credit card company
* The debtor’s ability to pay off outstanding balances
* The debtor’s ability to pay balances in the future
Real Life After a Bankruptcy Filing
The factors listed above notwithstanding, many people find themselves without credit cards after bankruptcy. For those who have had credit cards for their entire adult life, it can be difficult to learn to live without them. Unexpected financial needs such as car repairs, doctor visits and home repairs can put a strain on the weekly budget, and many use credit cards to cover the shortfall. However, judges and trustees are reluctant to allow a debtor to accumulate more debt, especially on a credit card. To live a post-bankruptcy life without credit cards, you’ll need to save where you can, budget carefully and spend as frugally as possible.
In Places with Strict Laws, are there Exceptions Which Allow Debtors to Keep Credit Cards?
Some jurisdictions, such as North Carolina, are strict with regards to retention of credit cards after bankruptcy. A Chapter 13 trustee will not allow a person to use a credit card to accrue more debt, but in some cases cards can be used for work purposes. For instance, a delivery driver can use the card for fuel, tolls and other expenses, or a small business owner can use a card for inventory and administrative expenses.
Trustees only allow debtors to keep cards if the balance can be paid monthly. If you are unsure about the role of credit cards in bankruptcy-related issues, it is a good idea to talk to a bankruptcy attorney in Grand Rapids MI.