Ch 13 Secure Credit Card Question

[max2k10]

Hi All, I need some advise. I know there are a ton of info on this site about credit cards, but I would like to ask the following. I want to start building my credit back up. My attorney has told me that I do not need to ask the trustee for permission to apply. Is that true? If approved, I'm not planning on incurring new debt. More of just using to pay some of my monthly things like groceries and then paying off in full when due.
Last week, I was about to apply for a Capital One secure credit card which I read is one of the better ones due to low fees. This is one of the companies I owed money to for my BK. Is this a no no? I only stopped my application when was asked if I had things like 401k and how much. I cancelled my application at that time. I did not feel comfortable disclosing that info.

Does anyone have any suggestions? Or can recommend a secure credit to apply for? I would really appreciate all your feedback.

[159515951]

My attorney advised me to avoid applying for any credit, be it secured or otherwise, unless I received approval from the Trustee and had a really good reason for needing it. If your attorney advised you otherwise, it sounds like you have a more lenient Trustee...you have to trust your attorney. If not, you need a new one!

[BNKRPTinNC]

Maybe it's just me but I don't know how a secure credit card helps your credit. You can only get out what you put in it, no? I certainly wouldn't pay a fee to use my own money which, in essence, is what a secure card is allowing. I do remember that we were offered one at the begining of our 13 for an exorbitant fee and a usurious interest rate, like we could even afford it. I do think you will find that it will be difficult, if not impossible, to even acquire an actual credit card while in an active 13. Perhaps that is the reason your atty gave you the go ahead to apply.

For us, we have concentrated on paying all bills on time, save for that rainy day, and let the credit scores be as they may to be addressed after discharge.

[LadyInTheRed]

Your attorney says you don't need permission to apply for a card. Applying for and having a card is not incurring debt. Did you ask your attorney if it is okay to use the card once you have it? If he says yes to that question, then I think you can follow his advice.

In some districts a Chap 13 is prohibited from incurring any debt at all. In others, debt under a certain limit can be incurred. Check your confirmation order and any documents you received from your trustee to see if there is anything regarding incurring new debt.

[LadyInTheRed]

Maybe it's just me but I don't know how a secure credit card helps your credit.

If the creditor reports regular usage and ontime payments, it is a possitive on the report.

I certainly wouldn't pay a fee to use my own money which, in essence, is what a secure card is allowing. I do remember that we were offered one at the begining of our 13 for an exorbitant fee and a usurious interest rate, like we could even afford it.

For some people, it's worth paying an annual fee to rebuild credit. The interest rate shouldn't matter if you pay the balance every month.

[max2k10]

We do have a very strict trustee. When we went to our 341 meeting, I thought I was going to crap in my pants. She was extremely mean and very intimidating. Anyhow we would like to purchase a new home after we are done with this bk. So it's extremely important for me to start building my credit back up. Plus I have to do some business travel and need a credit card in order to rent a car. At this point, attempting to get a credit just for an emergency and to rent a car is a necessity and not a luxury.

[BNKRPTinNC]

If the creditor reports regular usage and ontime payments, it is a possitive on the report.

I follow but what's a "positive" worth in terms of score? Just curious.

For some people, it's worth paying an annual fee to rebuild credit. The interest rate shouldn't matter if you pay the balance every month.

True, but I have difficulty wrapping logic around the idea of funding an account that allows, generally speaking, only what is available and then has to be paid back in order not to accrue interest. Unless there is a substantial advantage to this, in raising one's credit score, I would just as soon put that money in a shoe box and pay it back each time it is used than to have funds tied up to gain a couple of points.

[magic13]

It is indeed possible to acquire credit and raise your credit score in certain distrcts. In the Eastern district of Michigan they have raised the limit from $1,000 to $2,000 and the credit companies are responding accordingly. Matter of fact a Judge recently ruled against an objection that is is virtually impossible to complete a chapter 13 without some available credit. The credit card companies that I had zero balances and didn't bankrupct have since lowered the available credit to these magical limits. I say check with your Attorney he or she is aware of what you can do and can't do.