The idea behind the bankruptcy law is to allow the honest debtor a fresh start financially by eliminating all of the debts owed by the debtor.
Why then, would someone want to keep a credit card even though they are filing bankruptcy?
To me, it appears the answer is simple: Emergencies. Many people are afraid that if they don't have access to a credit card, they won't have funds for an emergency. This brings to mind my freshman year of college. As an 18 year old, I was taken in by that free t-shirt! I did ask my parents if I should get a credit card. Their answer, "It's a good idea to have one for emergencies". The only thing wrong with this statement, I found that I found myself in a lot more situations I felt qualified as "emergencies", where I would use that dependable credit card.
If life, there are valid emergencies and in those moments, knowing you have a credit card to fall back on to help you out of the mess is gratifying. However, don't you think it would be even more gratifying if you could fall back on your savings and not have to rely on a credit card company to help you in an emergency? Filing bankruptcy and achieving that fresh start is a great time to break yourself of the myth, perpetuated by the credit card companies, that credit cards are the solution to life's emergencies. Just think, after you have eliminated your debts with your bankruptcy, you can take that minimum payment you were sending to the credit card companies each month, $100/month as an example, and pay it into your savings account. With your own emergency fund, you could concentrate on rebuilding your credit without worrying that one emergency will send you back into debt.
With a little consistency, you will have a nice emergency fund built up in no time. Refrigerator acting up? No need for a credit card. Need to fly across the country to visit your sister after an accident? Now you can make that trip with your emergency fund, and not be still be paying for that plane flight and the interest accrued on it a year from now.
When someone files for bankruptcy, the court requires they list everyone they owe money to in their bankruptcy petition. I advise all my clients when signing the bankruptcy petition, that they are declaring under penalties of perjury that they have done so. While I would like to believe this advice is followed by every client, I am not that 18 year old college freshman anymore.
Some of my clients, hoping to keep that one credit card, have failed to list that particular card on their bankruptcy petition. However, this plan does not work out. You see, credit card companies subscribe to services that let them know when their customers file bankruptcy. Once they have been notified of the bankruptcy, the customer's account is then closed. So, the bankruptcy filer is unable to use the credit card, and they have not listed the debt on their bankruptcy.
Why not free yourself from that ball and chain and take control of your financial life by saying "goodbye" to the idea that you need a credit card to help you out of a jam and, instead, rely on the emergency fund that YOU created!
Author Resource:-
Learn more about bankruptcy. Stop by K. Hunter Goff's site where you can find out all about this bankruptcy lawyer and what he can do for you.
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