Friday, December 16, 2016

Am I Allowed To Keep An Emergency Credit Card If I File Bankruptcy?

One of the scariest things is to have an emergency come up, and have no money available to cover the expense. A lot of people try to establish an emergency savings fund for these instances, but it is not always possible to put extra money aside each month. Other times, use of a credit card is necessary to pay for new tires or a home repair. But if you have too much debt and cannot pay it all back, an emergency fund is not likely to solve your financial problems. One thing that will help you though is to file for bankruptcy.

But what do you do if you file bankruptcy and still have an emergency? Are you allowed to keep an emergency credit card during your case? The most probable answer is no, and here is why:

●          When you file a bankruptcy case you are required to list out all of your debts, including all of your credit cards.
●          The debts that are listed in your bankruptcy will be discharged, which means they are no longer due. When your case is finished you cannot be asked to pay for a discharged debt. When one of those debts is a credit card you had hoped to use for an emergency, the card issuer will not let you continue to use the card since it is no longer considered a valid debt.
●          Creditors stop extending credit when you file bankruptcy, at least your current creditors will take this step. Many credit card companies will even close your account, making it impossible to use the card even if you tried.

If all of this has you worried that you will find yourself in need of fast cash without any options, keep in mind that when you discharge a debt you don’t have to pay it anymore. Without all of the payments you are currently making, you save money each month. So your best bet to prepare for an unexpected expense is to take the money, or at least a portion of it, that you were paying toward debt that is being discharged and start a savings account or emergency fund. This way, when you need to get a new washer or dryer, there will be a fund already in place with the money you need. Even the smallest amount each month can add up, and if you encounter an expense before you have enough money saved, there are lenders that will work with you even with a bankruptcy on your credit.

For more information about bankruptcy, contact us at We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.

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