Secured card during Ch. 13?

[kmb]

I have two Orchard Cards that I use strictly for business purposes. I travel for work also, and AmEx cancelled my corporate card when we IIB'd our personal cards. Neither one has a very high limit, but so far I've been lucky enough that between the two, it's been enough for a business trip. I PIF as soon as I get reimbursed. Plus, hotels and car rental companies put a huge hold on your bank account if you use a debit card, and I obviously don't have thousands of dollars just laying around in my bank account, as I wouldn't be here if I did. If my Trustee isn't happy with it, oh well--he'll be even more unhappy when I lose my job because I can't perform the duties and can't make payments at all.

Just my two cents of trying to survive for the next 51 months.

[fslady]

Trustee and new credit

I understand that we are not supposed to incur debt without the trustee's prior approval. But from what I've read, trustees don't normally pull credit reports - so how would he or she know? I'm not planning on applying for one of the numerous card offers I get weekly but I still wonder how the trustee would find out about a credit card.

[MajorMike]

Correct, Mike, however, in a chapter 13 you're not supposed to have a credit card. A secured credit card is a credit card even though it is secured.

You start rebuilding credit AFTER you're discharged. And I think it's for *either* bankruptcy. I don't understand how you can have any amount of credit if you're bankrupt?

This is NOT credit. You fund it with your disposable income and use it as a debit card that will report to the credit agencies.

[MajorMike]

KMB, I understand what you're saying as well, but you can't tell the trustee, OH WELL because he could have your case dismissed and then where will you be???

I have two Orchard Cards that I use strictly for business purposes. I travel for work also, and AmEx cancelled my corporate card when we IIB'd our personal cards. Neither one has a very high limit, but so far I've been lucky enough that between the two, it's been enough for a business trip. I PIF as soon as I get reimbursed. Plus, hotels and car rental companies put a huge hold on your bank account if you use a debit card, and I obviously don't have thousands of dollars just laying around in my bank account, as I wouldn't be here if I did. If my Trustee isn't happy with it, oh well--he'll be even more unhappy when I lose my job because I can't perform the duties and can't make payments at all.

Just my two cents of trying to survive for the next 51 months.

[jgarton244]

You can have a credit card while in chapter 13. That does not violate the plan. We had a Household CC during our plan. It was a $39. annual fee. Trustee said as long as we paid card in full each month, we were not accumulating additional debt. It was initially a $500. limit. We used the card, paid in full each month, and after two years into the plan, we were able to get a CC without any fee's. Cancelled the Household, and kept the card with no annual fee. We had no issues, but we did ensure that we paid in full each month.

[CindyLou]

We're looking to rent a car when we visit family this summer - ours aren't reliable - places I've checked say we have to have a credit card. An ATM with the MC/Visa logo aren't accepted as credit. Might be one reason to have a secured card.

The majority of major car rental companies take debit cards IF you are renting from an airport and have proof of a round trip airline ticket showing the same travel dates corresponding with your rental. Be careful though....they will hold out add'l money..sometimes $500 over the cost of the rental, just because its a debit card.

You have to call the location where you will be picking up and ask them their rules regarding debit cards.

[kmb]

MajorMike

My lawyer told me that as long as the cards were only used for business and if questioned, I was able to pull the statements and prove it, even if the trustee found out, I would have enough of a case to justify it and would also be proving that I was not incurring new debt, since they are alwasy PIF'd as soon as I get reimbursed from each trip. Since being in Chp 13, I've had to charge over $7000 in business expenses with some months being over $2K. I don't have that kind of money laying around.

You can use a debit card for hotels and rental cars, but they do put a huge hold on your funds--hotels typically add at least an extra night's room rate for "incidentals" and rental cars typically put a $500 hold on your funds. I don't know about any of you, but being in BK, I don't typically have an extra $500-$1000 just sitting in my bank account to be made not available at any given time--and that's exactly what my bank does, even if a charge has not cleared, when there is a pending charge against funds they are made completely unavailable to me and have even resulted in overcharges to my account.