Keeping a credit card open in 13

[shipo]

Yeah, I'm guessing AMEX is the issuer as that card is explicitly listed on their web site. Kind of a bummer as I travel, errr, travelled pre-COVID, a lot on Delta and having that card would pay some nice dividends.

[flashoflight]

Hi,

The question I have is that I have one paid off credit card that has survived the filing. I’d like to charge a small amount, like groceries and then pay it right off in order to maintain my positive payment status and keep the card open. Does anyone have any experience with this and having any issue? The last thing I want to do is jeopardize my plan, I really need to make this 13 work.

Thanks!

Do it once a year starting 11 months after the last pre-petition transaction to keep it from being closed due to dormancy. Pay it off the day after purchase in full. That card will be useful in a rebuild. Don't poke the bear with a credit line increase request or with a large charge. If you put a $5 charge once a year and pay it off next day, nobody is going to care or even notice. I might wait til after confirmation hearing though.

[eap82]

Do it once a year starting 11 months after the last pre-petition transaction to keep it from being closed due to dormancy. Pay it off the day after purchase in full. That card will be useful in a rebuild. Don't poke the bear with a credit line increase request or with a large charge. If you put a $5 charge once a year and pay it off next day, nobody is going to care or even notice. I might wait til after confirmation hearing though.

I think this sounds like a good plan. Thanks!

[dramos23]

Before filing, my attorney told me flat out you have to give up all credit lines, no exceptions. I had taken out a new cell phone account with a new carrier before filing for bankruptcy. I didn't think that was part of my credit line dahhh. My credit was still not that bad and they approved me for 2 new lines, 2 new phones and accessories only to find out they closed out my financing of the phones and accessories one month after filing. My bill went down about $70 per month. I called them but they were not very clear, all they said was you have a bankruptcy, account was closed. I was lucky they did not close the phone lines, still with them because no other carrier will take us.

[dramos23]

Yes, I did burn AMEX, but that was in 2008. As for when I was in the Chapter 13, it was a co-branded card and was not issued by AMEX themselves. For what it's worth, I'm back in the good graces with AMEX. I thought it was normally 20 years, but they seem to like me now.

Do you know how long does AMEX keep you on their black list? I've heard different stories, just curious. Someone told me AMEX will ban you permanently and you will always show up in their system as an unwanted customer. I guess that is not true.

[justbroke]

Do you know how long does AMEX keep you on their black list? I've heard different stories, just curious. Someone told me AMEX will ban you permanently and you will always show up in their system as an unwanted customer. I guess that is not true.

There are different datapoints and it is anywhere from 10 to 20 years. I became an authorized user on an AMEX account but AMEX would not issue a physical card. However, the card did report to the bureaus. About 2 years later, in 2018, I could actually apply for an AMEX card without the automatic denial!

That was a total of 10 years for me on the blacklist.

[shipo]

I read a rumor elsewhere AMEX has loosened their underwriting rules a bit in an effort to gain return customers. Said "rumor" goes like this, "AMEX's new rules start allowing potential customers to be approved 61-months after filing a bankruptcy, or one month after the bankruptcy falls off the credit report; whichever comes second. The only wrinkle is if you burned them, depending upon how much money was involved, it may take longer, sometimes a lot longer."

Personally I take the above rumor with a healthy grain of salt; at least as far as I know, there is no way a bankruptcy of any sort falls off an individual's record in 5-years; last time I checked, it was 7-years for Chapter 13 and 10-years for Chapter 7, so right off the bat, something doesn't seem Kosher. My plan is to wait until next April, just over the 7-year plus 1-month time frame and apply for the lowest of low Delta SkyMiles cards; I fly, or at least before COVID I flew, Delta almost exclusively, and not having a SkyMiles card definitely inhibits my ability to gain status.

Stay tuned, next April I'll let y'all know the outcome.

[justbroke]

I would also take the rumor with a grain of salt. That is not my experience.

[NoMoney30]

I'm about 2 years into my 13. I had about 5 cards that "survived" and did not get closed. 2 of which are with USAA that I bank with right now. Per my paperwork, I'm allowed 5,000 in debt without approval. I use my cards and pay them off. /shrug... my case doesn't require me to submit any bonuses or tax refunds etc... they have been completely hands off since my confirmation.

[shipo]

I'm about 2 years into my 13. I had about 5 cards that "survived" and did not get closed. 2 of which are with USAA that I bank with right now. Per my paperwork, I'm allowed 5,000 in debt without approval. I use my cards and pay them off. /shrug... my case doesn't require me to submit any bonuses or tax refunds etc... they have been completely hands off since my confirmation.

Wow, what state are you in? Here in New Hamster all but the first $1,250 of a tax return had to be turned over to the Trustee, and literally zero credit was allowed without permission.

[justbroke]

shipo try $0 here in Florida. That's right, we get to keep $0 of our tax refund unless we ask nicely and have a legitimate reason to retain all or a portion of our refund. I got to keep some or all of it about 3 of the 5 years. But I had to ask and file a motion with the court to modify the plan to exclude the specific year. (Also could not obtain any in credit without permission either.)

[NoMoney30]

Wow, what state are you in? Here in New Hamster all but the first $1,250 of a tax return had to be turned over to the Trustee, and literally zero credit was allowed without permission.

Virginia. I think it varies by district as well as state. They had proposed different offers for my case and I think one of them had a lower payment but required me to give my taxes and bonuses. The one I accepted didn't require it. My attorney called it a "flat" plan that does not require structured payments at future dates.

I don't get tax refunds anyways... I have my withholdings set up so that I owe them every year.

[mh321]

We will be done with 2 years next month. One of my cards survived the filing. It was a card that I had not used in ages, even before the filing. It has a $500 limit on it and all 3 credit bureaus still show it reporting with on-time payments. I don't care even try charging anything on it....heck, I think I even cut up the card when we filed. I'm just letting it sit and we'll see if it's still there when this is done.

[flashoflight]

I got to keep some or all of it about 3 of the 5 years. But I had to ask and file a motion with the court to modify the plan to exclude the specific year. (Also could not obtain any in credit without permission either.)

In my situation, this would incur legal fees and highly discouraged more than once and only for a true unexpected emergency that wasn't anticipated in the budget already. Funeral expenses is OK but dental may not be when you have medical expenses above the default in the budget. Combined federal and tax refunds net of $500 you can keep, which according to my lawyer is designed to avoid these motions to retain tax refund.

Credit in my district without asking for permission is allowed up to $1k for non-emergency purposes.

[justbroke]

flashoflight that's much better than my district. My issues with HOA violations caused by the lack of upkeep because, well, the Chapter 13 plan didn't allow for the type of maintenance required. Then had a sewer line break. Then had to re-sod a good portion of the law ($2,400 alone). So I'd rather have had the $1K and the $500 in the refund.