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Rethinking Your Relationship With Credit Cards After Bankruptcy


One of the most persistent myths about bankruptcy filings is that, after you file for bankruptcy, you will never be able to use a credit card again.  Not only are there hundreds of thousands of current credit card users who have previously filed for bankruptcy, but you might find that new credit card offers start arriving in your mailbox just days after you file for bankruptcy.  A bankruptcy filing is an opportunity to rebuild your creditworthiness, so you should not necessarily avoid credit cards entirely after a bankruptcy filing, but you should avoid falling back into the bad habits that led you to require bankruptcy protection in the first place.  A Boca Raton chapter 7 bankruptcy lawyer can help you make the best decisions about using credit cards after a bankruptcy filing.

How Chapter 7 Bankruptcy Affects Your Credit Score

In most cases, filing for chapter 7 bankruptcy lowers your overall credit score, but only temporarily.  The bankruptcy filing remains visible on your credit report for seven to ten years after the initial filing, but remember, your credit report shows the good as well as the bad in your financial behavior.  Most people who file for chapter 7 bankruptcy see their credit scores start to improve one to three years after the filing.

How to Stay Out of Trouble With Credit Cards After Bankruptcy

Using credit cards cautiously after filing for bankruptcy can help you rebuild your credit more quickly.  Building your way back to qualifying for credit cards with high credit limits will take time and patience.  These are some of the most error-proof ways that you can use credit cards in the first years after a bankruptcy filing:

  • Open a secured credit card account. A secured credit card starts out like a debit card in that you prepay for the credit limit (usually $200), but if you keep up with payments on your purchases, it can convert to a conventional, unsecured credit card after a year or so.
  • If you receive offers to open a credit card account soon after you file for bankruptcy, only open one, and convince yourself that its credit limit is much lower as it is, so that you can keep your credit card balance low. Do not open a second credit card account until you have paid off the balance of the first card in full for several consecutive months.
  • Have a family member or friend co-sign for a credit card with you if they are willing. This will give you access to credit you would not have otherwise had so soon after a bankruptcy filing.  Being accountable to someone you trust may also help you avoid falling back into bad spending habits.

When Rebuilding Your Finances, Focus on Long-Term Solutions

There are few quick fixes, but there are ways to get out of debt.  A chapter 7 bankruptcy lawyer can help you discharge some of your debts and address some of the underlying financial problems.  Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.



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