Being in a tough financial situation has all kinds of consequences. If you end up having to file for bankruptcy, you may feel some of your privileges are taken away. Your bank accounts and credit cards will be frozen, but that doesn’t mean you won’t have access to money for necessities. You’ll still have the money you need to buy groceries, pay your utility bills, and pay your mortgage or rent payment.
Why Are Credit Cards Frozen?
In most cases, a credit card company won’t just freeze your account; they’ll cancel it all together. While this may be a reason you’ll want to keep a certain card off your bankruptcy petition, that’s against the law. You must report all of your credit cards, even if you strictly use them for business. Do you have cards you don’t have a balance on? You must also report those. Any creditor you owe must be reported as well. When creditors cancel your account, it’s because they realize you have no way to make good on what you owe, and they don’t want to loan you more and more without a way for you to pay it back.
What About Business Accounts?
If your employer has given you a credit card to use for business purposes, you still have to list it on your bankruptcy petition, but there’s a chance you’ll be able to keep the account open. If you’re an authorized user and the company gets billed for the purchases you make, the creditor won’t likely cancel your card. If you’re an obligor and you pay the bill yourself, the creditor will probably cancel the card, even if you are reimbursed by your lawyer for those expenses.
Can You Get a New Credit Card?
After bankruptcy, you might worry your name will be on a list of people unable to get credit cards, but that’s not true. If you wish to get a new credit card, you can often apply and qualify for a credit card within a couple months of your bankruptcy case closing. Credit card companies see your wiped-out debt as an opportunity for you to use your current income to pay new bills. They feel you will be more cautious about credit after dealing with bankruptcy. They know you can’t file for bankruptcy again for eight more years, so if things do go bad for you again, they have a lot of time to collect.
Contacting a Bankruptcy Lawyer
Whether you’re facing bankruptcy, are in the middle of the process or are looking for a way to rebuild after your case is closed, a lawyer may be able to help. Contact a bankruptcy lawyer, like from Chorches Bankruptcy Law, today to find out how.