Attorney's advice

[phoenix44212]

My divorce attorney advised me to get a new credit card (and then not use it) prior to filing for BK to have for later. Does this make sense?

[SinkingFast]

You can try it, but it may not work.

We had several accts with Zero balances. Paid in full. We did not include them in BK. All but 1 were closed by the Credit Grantors. The 1 that remains open, the Credit Grantor reduced the Credit Limit during the BK.

If you're looking at going Ch 7 and you had decent Credit before you got into financial trouble, you'll get plenty of CC offers after BK. Some pretty decent. Some really stinky and thick with fees. But you'll get offers none the less.

If you're looking at going Ch 13, having a CC could be a temptation that could lead to Plan disaster. You have a tough month, with an unexpected expense, and it would be real easy to lean on the CC. Then you're playing "Catch Up" to get back in rhythm on your budget.

[phoenix44212]

You don't think it would raise any eyebrows applying for credit cards prior to filing BK?

[SinkingFast]

Well there's always the risk of that.

If you go an apply for a new CC one month then file BK the next, the definitely would have the Trustee scratching his head. "What in the world was this person thinking??!!"

But if you're only in the beginning stages of thinking BK may be one solution of many, and your eventual filing may not occur for 6 months or longer, then it may be perfectly fine.

There are instances were people get ill, loose their jobs, a spouse dies, or some other life altering catastophic event occurs. You applied for a CC a month ago and could not have predicted this turn of events. Your job typically pays bonuses, but no bonuses will be paid and a hiring and wage freeze are implimented after you get the CC. Those types of events are out of your control.

So a person could honestly apply for a CC and a short time later be filing for BK. The whole crux of the issue here is the Creditor has to prove you knowingly intended to defraud the Creditor. At the time you applied, you knew you did not have the means to repay. In many instances, that's very difficult, at best, for the Creditor to prove. Most especially if you open the acct and then never charge anything on it.

[lrprn]

You don't think it would raise any eyebrows applying for credit cards prior to filing BK?

The key is not making charges on the card before filing. If you made charges and then filed within 90 days, then that would definitely raise suspicions. With a 0 balance, you don't have to list the card on your creditor list.

However, SF is right - the chances of a credit card surviving filing bk, even with a 0 balance, is very low. The credit card companies share information about debtors between themselves (that's how they all know to raise APRs sky high if you pay late or miss a payment to one of them). If you file listing one or more credit card companies, they will all know.

A few people here have been lucky and not had a credit card with a 0 balance cancelled after they filed, but the vast majority have all their cards cancelled quickly once the cc companies find out they filed.

[sofarindebt]

First Premier

I got a credit card with First Premier, the credit limit is $300 and the fees were $200. I got her to knock the fees down to $75. I told her I was filing chapter 7, she said to reaffirm the card and they would not cancel it. Should I trust her?

[AMISLANDER]

A card not closed

My Dillard's card was zero when I filed. It was not closed during the bk...sometimes it just depends...

[spell]

You could try it. It's up to the individual company to decide to keep it open or not.
But he may be behind the times in what credit is like after bankruptcy.
Your mailbox will be full of offers for new cards.