Most people want to have at least one credit card in case of an emergency. Credit cards can be useful tools, especially if you want to safeguard your family. For instance, if your car breaks down or if you have a pipe burst in your home, what do you do if you don’t have the extra money in your savings? For most Americans, a credit card would be the answer to that problem. While you may want to keep a credit card for security reasons, it becomes more complicated after you file for bankruptcy.
Can You Keep Your Credit Cards?
One of the first questions that clients often ask is whether they can keep one of their credit cards. Perhaps they have one credit card that they barely used, which has a great interest rate and otherwise is an asset. Unfortunately, once you file for bankruptcy, you have to list all of your credit card accounts and all of your debts. You will not be able to keep your current credit cards once you file bankruptcy. If you fail to mention a credit card and the lender finds out that you filed for bankruptcy, then odds are the lender will cancel your card right away.
Can You Apply for a New Card?
Once the dust of your bankruptcy has settled, you can apply for a new card. Keep in mind that for the next 10 years, bankruptcy will be on your credit report and your credit will take a hit. When you have low credit, it is more difficult to obtain a credit card. It is even harder to obtain a good credit card with a low-interest rate. Now, the 10-year rule does not mean that your credit will be low for the next 10 years. You can start rebuilding your credit as soon as possible. However, you should be careful about how you go about it. Most clients choose to apply for secured credit, rather than unsecured. If you apply for secured credit, then you put a deposit down and that turns into the balance that you can borrow against.
A lot of people fear bankruptcy because they worry that they will never be able to improve their credit or that they won’t be able to have a credit card again. While you cannot keep your current cards, you can apply for a new credit card later on.