Can I Use My Credit Cards after Filing for Bankruptcy?

Whether you realize it or not, when you first applied for your credit cards, you signed a contract. The offer of credit and your agreement to pay were both based upon the information you provided about your financial standing at that time. The bad news is that once you’ve filed for bankruptcy, that standing changes significantly, and as a result most credit card companies will automatically cancel your cards — even if you don’t owe them a cent. It’s all a normal part of the bankruptcy process. The good news is that you’ll probably be inundated with new credit card offers in a very short amount of time.

One of the most frightening aspects of filing for bankruptcy is the knowledge that – at least initially – you’re going to be without credit. We’ve all become so reliant on our credit cards that most people rarely carry cash with them. That all will change when you file for bankruptcy, but only for a short period of time. Once your bankruptcy proceedings have been completed and your debt has been fully discharge, you’re likely to receive applications for new cards from several companies.

It may seem counter-intuitive for credit card companies to offer credit to somebody who has just discharged all of their credit. But credit card companies take advantage of your new status, which limits your ability to file for bankruptcy again for several years. That means that if you get yourself into debt again, you are going to be stuck paying the bank’s fees for years.

To avoid getting into trouble again, it is important for you to be selective about the cards that you apply for and meticulous about repaying your debts. If you want to restore your credit, you will want to be much more careful about the way that you use your credit, and you will need to pay off your cards every month, on time.

Rebuilding your credit is a significant goal after bankruptcy. Applying for new credit cards is an important part of that process, but you need to exercise care both in the cards that you select and how much you charge. As tempting as it may be to fall back into old habits, it’s a mistake.

As part of the bankruptcy process, you will be required to go through financial management classes. Be sure to pay attention and take these classes seriously —  they can keep you out of trouble. For more assistance in approaching your bankruptcy with the right mindset and goals in mind, contact our firm today.