Posts Tagged: ‘Credit History’

Life After Bankruptcy: Getting a Credit Card Again

October 25, 2017 Posted by kingcade

If you have recently filed for bankruptcy, you may be wondering about the possibility of getting a new credit card. Before you apply for a credit card, it is important to make sure you have a stable job and the ability to pay your other bills such as rent and utilities.

If bad financial decisions led to your bankruptcy, you may want to avoid getting a credit card for a while. However, if unexpected events such as a divorce or a job loss led to your money problems, you may be able to handle a credit card again.

Below are three important things to consider before filling out a credit card application:

  1. Timing is everything. Your bankruptcy must be discharged before you can get a credit card. Lenders will deny a line of credit during a bankruptcy proceeding because the account can be included in the bankruptcy. It takes approximately three months for debts to be discharged after the initial filing of a Chapter 7 bankruptcy. A Chapter 13 bankruptcy entails a three to five-year partial repayment plan and therefore takes much longer to be fully discharged.
  2. Weigh your options, good and bad. A recent bankruptcy will drag down your credit score for some time. As a result, you will likely receive credit card offerings from subprime lenders. Keep in mind that these credit cards typically come with higher interest rates and low limits. In addition, they typically require frequent fees that are much higher than most. A better option after a bankruptcy discharge is a secured credit card. This type of card is designed for consumers with bad or no credit. They are backed by a security you are required to put down. Secured cards have low limits and high interest rates but do not typically charge annual fees.
  3. Monitor your credit score. If you do get a secured card, do not spend more than 30 percent of the credit limit and pay off the balance every month. If you follow these two rules, your credit score should improve in time.

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If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.