Would secured cards be considered an asset during a bankruptcy? I have been considering opening two accounts with Sterling and FCNB prior to declaring bk, but I'm wondering if the courts would yank the deposits and close the accounts. Cynthia
not sure what the exact answer would be. But when filing for bk, you have to list all your creditors. I would wait after the bk filing. I received a secured Cap 1 60 days after filing for a bk-13. Best regards, Mirage
Wait until after the BK. What is important to potential lenders is what you have done since the BK. Most lenders will ask if you have established any tradelines since your discharge. Beside that it might look funny if you open up accounts even if secured before you file BK. Especially if the trustee finds out. When we filed we were asked what bank accounts we had and what the balances were. I would not take the chance. You should still be able to get the cards you listed after the BK.
Cynthia- Don't get any cards before you file. You will most likely end up losing them or worse! Remember, you are going before a judge to approve your BK. Something like that could make him change his mind. He might see something like that as an attempt at fraud??!! Most CC companies are going to try and 're-affirm' your accounts for xx pennies on the dollar during the BK, especially if you had good status with them up until the BK. These 're-affirmations' will be negotiated between you and the creditors through your lawyer (you did take our advice and talk to a lawyer, right Cynthia? nudge nudge wink wink). For example, Capital One made an offer for me to 're-affirm' my account, 8k balance, for $2500.00. That meant they were willing to resore my account to positive status with the same 8k limit but with a 2500 dollar balance instead of 8k. Other CC companies, i.e. Citibank and ATT Universal, made similar offers. I declined the offers on the advice of my attorney. I often think about what would have happened if I had took their offer. Another thing....I talked to Cap one about my BK account a few months ago. I was told by the Executive Office that my re-affirmation was a 'standing offer' and that as long as I had their offer in writing I could accept it at any time. I just thought that was a little peculiar. You attorney (ahem) will be able to look deeper into your situation and advise you as the offers come in. Don't forget- I received my first post-BK CC 3 months after BK, a Providian card for 1000.00 ( I think it was 1000 right off the bat, I can't check right now) and my second, Cap One for 300.00 6 months post BK. There were other offers sent but they were a lot less attractived then those. Look back over the BK thread we had going before, I showed the list of accounts I obtained after BK and the time period I got them in. I am sure others here have had similar experiences and can fill you in even more. I am sure you are nervous- I was scared to death- but you can do it. There are hundreds of helpful people here (and a few that are grumpy sometimes as you have already found out) that are ready to help you through it and rebuild. I wish I knew about this place when I did it- I was all alone. Investigate your options, CCCS, BK, selling body parts, moving to Mexico (just teasing on those last two, trying to cheer you up), and make the best decision for you. You seem very intelligent and I know this experience will only make you stronger. Think about it like this (one of the things I did to help me get through it)...This is as bad as it will ever be. It is only going to keep getting better and better and better. You have already been through the worst....maxed out and can't make ends meet...the stress, not wanting the phone to ring, etc. When you walk out of that meeting it all starts over. You will have what it takes to make your self and your life the best they can be. It can only be what you make it...... Shawn
That is my sentiment exactly. I just could not come up with the right words to express it. This is why the bankruptcy court wants to know if you have used your credit cards in somthing like the last six months prior to filing. True, but not all CC companies do this. Remember, Shawn said "most CC companies." When I read this, it set panic in me as I thought that perhaps a couple of the accounts I had re-affirmed on for less than what I owed might still be open. I do not have definite confirmation on my particular creditors yet as I need to contact them directly, but was told by their attorney's office (where I send my payments) that they are told by this particular creditor that the accounts are closed. The only reason I reaffirmed was it was less expensive to pay the negotiated amount rather than replace the two items I did this with. Wait until after the BK to get your cards if you decide to file.
My lawyer basically said "why do it?". His reasoning was that I was going to negate part of the 'benefits' of BK by agreeing to keep a debt. I trusted him, I had no other source of advice at the time. Cap One was going to let me keep the same 7500.00 limit- which was 8k at the time because of late fees, over limit fees, etc- but 'knock' the balance down to 2500.00. It would have been 'regular' credit card debt that I would pay monthly. I would have had 5000.00 credit available right away. Correct- not all credit card companies will choose to try and 're-affirm'. I think those that will are doing so to 1- try and recoup some of the loss and 2- know you can't file BK again for 7 yrs even if you want too, so they are going to get your money this time. You seem very worried about getting credit after your BK. My first concern was eliminating my debt and getting rid of the collection agents. I am not saying you are wrong or anything, just that you really should talk to a few financial 'experts' before making your decision. BK was the right option for me, but if your situation might be different and you might have a 'better?' option. You will get credit after BK. I climbed back up pretty fast, and others here did it even faster. Really learn all the details about re-affirmation if you do it- there may be catches. I didn't look into it as I just trusted my lawyer. Who knows, maybe I should have. Maybe not. That 7.5k of credit with Cap One would have cost me 3k (figuring interest until I paid it off). I already have about that much with them now and it didn't cost me anything (well, 49.00) and it has only been 3.5 years. I think I was better of not doing it in this case. Really look hard at your goals.... Shawn
If you have the money pay off the one you to keep. You only list obligations that you owe on. This is how some people have accounts that survive bankruptcy. Keep in mind they can check your CR afterwards and cancel your account. I heard AMEX does this.
When we filed, the last thing we thought about was getting cards after BK. In fact cash sounded good until you realize that you need new post BK tradelines to re-establish so you can get a loan if you need it down the road. You need credit to rent, finance a car, etc. Anyone that says you can't get a credit card after BK is wrong. You just can't get that Citi with the 9.9% rate. Don't try to get a credit card pre-BK if you think the BK will not allow you to have a card. Besides the secured cards will be there for you afterwards and will work more to your advantage post BK.
Lot's of good advice here! You 'might' have a crad survive BK, but it is very unlikely. Look at it as a gamble...you can pay it off but you might loose it anyway- Good money after bad, remember? Many people have managed to keep a cards post BK. I kept my Amex. BUT- I also almost ogt in trouble. Several months after BK a customer service rep called me and told me she was closing my account due to my BK. I waited a month and nothing had happened, nothing in the mail. The I got a letter. Amex pulled my Equifax for account review which does not show my BK but does show a few accounts included in BK. They did not close my acount but it is reviewed almost every two months. I use this card for work, travel, etc....for example, I charged almost 160k on it last year (love them amex points). I think this had something to do with them letting me keep it. The point is, don't plan on keeping any cards if you do it. BK really IS a clean slate- everything is wiped off. You are going to start over. If you do manage to sneak one through, or get a good re-affirmation deal, consider yourself lucky. You CAN keep car loans, I kept two. One in my name, one I was a co-buyer on. The BK had no effect on the loans but the banks WERE notified of my BK (I am pretty sure everyone on your credit report will be notified). I think a house is the same way. Cynthia- you WILL get credit after BK. After you file you can start cleaning up your reports. Follow the advice here and do not apply for ANY non-BK banks. Yes, you will start off low but you will build quickly. It's going to be ok. Shawn
Exactly. Right on the money. One of the best thing for me right after BK was NOT seeing a credit card in my pocket. Then it was getting my first one three months later. Then it was actually being able to PAY my bill, in full if I wanted to, every month. It was a great learning experience for me. I learned to get pleasure from paying the card off, not buying stuff. Of course, it was nice to be on my feet again and have the option of paying cash for groceries instead of being so broke I HAD to use my card. Shawn
First of all Shawn, I have two dogs; one of them for sure turns counter clockwise and I definitely am in the US. What would happen if I moved to Australia? Maybe he will turn clockwise! LOL Cynthia- Good thinking on your part. The only thing is you will want to get a card or two post BK. When the time comes to buy another house, the loan officer will ask you or look for any tradelines established since the BK. They want to see that you have re-established credit in good standing since the BK. Your old tradelines will help, but they don't seem to hold as much weight in the loan officers eyes as the new tradelines. By all means I am not saying to go apply for every sub-prime post BK card or every solicitation you get. Yes, take a step back and after several months try to re-establish a little credit. Depending on your timeframe for purchasing another home one or two years may be too long to wait to get new credit. You'll be fine with a couple of accounts and like Shawn said you will be surprised at how responsibly you handle your new credit and you will be on your way to preparing for a mortgage.
