As a general rule, you cannot keep a credit card after you file bankruptcy. I meet with clients from Dalton, Rome, Cartersville, Hiram and Dallas Georgia who will ask, “Why can’t I keep just one credit card for emergency situations?”
When you first meet with your bankruptcy attorney, tell him about every single credit card in your possession so that he can reinforce what I am about to say in this article.
When you file Chapter 13 bankruptcy, you cannot incur any new debt after the case is filed. For this reason, the bankruptcy trustee will specifically ask you at your hearing if you are in possession of any credit cards. If you answer yes, the bankruptcy trustee will file an objection to your case. Also, if you answer yes, your bankruptcy attorney might be a little upset that you did not tell him about the cards beforehand.
Filing bankruptcy in Georgia is a matter of public record. Credit card companies keep a close eye on who is filing for bankruptcy. As a consequence, most credit card companies will cancel your charging privileges whether you list them in your case or not. It does not matter whether you file Chapter 7 or Chapter 13 bankruptcy.
If you have zero balance on your card, you won’t need to list it in your bankruptcy case in Georgia. However, you will need to tear it up and throw it away if you are filing Chapter 13. In a Chapter 7 case, the creditor will most likely cancel your use of the card after your bankruptcy case is filed.
Even if you could keep a credit card, why would you want to? Keeping a credit for emergency situations is a bad idea. As you already know, most credit card companies charge you thirty percent interest. This means that if you get stuck behind the debt snowball, your debt could double in three years! Imagine how much money you will save over your lifetime if you never pay anymore interest on credit cards.
The solution is to establish an emergency fund. This emergency fund should never be touched unless you absolutely cannot go on without tapping it. Every single Georgia family will have some type of financial emergency at some point. For example, you know your car will break at some point. Do you have an emergency fund to cover the car repairs? If you own a house, you know that the roof is going to leak at some point. Some major appliance in your kitchen will break some day. Might be a few years from now but you know its coming. Start building the emergency fund now.
3. How much does it cost to file?