CH.7 just filed, if TRUE emergency, can we use a credit card?

[debbie42]

Hi, I am not looking to get a verbal beating from anyone here (as happened with my first question when I joined) but we have been preparing for filing and our attny. filed our Ch.7 case last week. We both have paid off old used cars and my husband commutes over an hour to work 3 days a week. His vehicle seems to be on the verge of a breakdown (stalling, etc.). In the event it needs major work, we cannot afford the payments in cash-how bad would it be to use a credit card (with intention of paying it back-so no fraud)?

If we had no other alternative, would it be better to use a cc included in BK and just reaffirm card's debt -is it too late to do that now that we've filed? Or would it be better to use an empty card that's not included (with every intention of repaying what we charge). He HAS to work so we can afford to rent a house once we lose this one...
I am sure we should have built up a big emergency fund by now but had to pay lawyers and save up for first last and security so we have somewhere to live.

I left a message fo rmy attny. but I expect the return call to take a few days.

Thanks for any advice you may have!

[backtoschool]

All credit cards that do not have zero balances have to be included in the bankruptcy. You cannot just choose to keep using one and keep paying on it. That would be a preferential payment and the trustee will take the payment and apply it to your whole bankruptcy estate. You can't reaffirm one unsecured creditor's debt, the way you can reaffirm a car or a house which is SECURED debt.

Choosing to use the card for a large purchase right before you file, knowing that you are going to file, is a red flag for the trustee and will cause your case to be examined more closely, but if you have receipts and the charge is for a necessity, you will probably not have your whole case thrown out. You could have the credit card company file an AP though. They may file an AP to keep that particular charge from being discharged. You may be asked questions as to when you first met with a lawyer etc, to determine your intent when you made the charge.

[debbie42]

Thanks for your quick reply. Our case was ALREADY filed last Thursday. We have a little cash on hand if it needed a new battery, etc. Just worried a huge repair is coming and we dont have the cash.

All cards with debt were included but I have several empty ones, some not even activated with $0 balances and most have never been used, those were not included.

I am thinking if we have no choice, it wouldn't get us in trouble, we would just owe it, whichis fine. It's not like a vacation being charged or a shopping spree.

[bkmaggster]

Hi, I am not looking to get a verbal beating from anyone here (as happened with my first question when I joined) but we have been preparing for filing and our attny. filed our Ch.7 case last week. We both have paid off old used cars and my husband commutes over an hour to work 3 days a week. His vehicle seems to be on the verge of a breakdown (stalling, etc.). In the event it needs major work, we cannot afford the payments in cash-how bad would it be to use a credit card (with intention of paying it back-so no fraud)?

If we had no other alternative, would it be better to use a cc included in BK and just reaffirm card's debt -is it too late to do that now that we've filed? Or would it be better to use an empty card that's not included (with every intention of repaying what we charge). He HAS to work so we can afford to rent a house once we lose this one...
I am sure we should have built up a big emergency fund by now but had to pay lawyers and save up for first last and security so we have somewhere to live.

I left a message fo rmy attny. but I expect the return call to take a few days.

Thanks for any advice you may have!

If you have a card that is still open, and you charge after your filing date, the debt is non-dischargeable and not part of the bankruptcy. I doubt the trustee would care about it since it is post-filing debt.

Chances are you will not have any open cards, though.

Also, for obvious reasons, charging during an active bankruptcy shows that you have a problem with living within your means and is the beginning of the road that led you to BK in the first place.

[whipster1]

Most likely that the cards have been closed already, even zero balance cards.

[backtoschool]

Thanks for your quick reply. Our case was ALREADY filed last Thursday. We have a little cash on hand if it needed a new battery, etc. Just worried a huge repair is coming and we dont have the cash.

All cards with debt were included but I have several empty ones, some not even activated with $0 balances and most have never been used, those were not included.

I am thinking if we have no choice, it wouldn't get us in trouble, we would just owe it, whichis fine. It's not like a vacation being charged or a shopping spree.

Any charges made after filing, are post-bankruptcy debt and are not dischargeable anyway. I wouldn't be surprised if those cards don't activate though. Credit card companies subscribe to services that let them know if any of their customers filed for bankruptcy. Once you file it goes on your credit reports almost immediately, and most credit card companies will close your cards.

I know in a Chapter 13 you cannot take on any new debt until your case is closed without the permission of the trustee. I don't know if this is the case for a chapter 7. Does anyone else know?

[debbie42]

I called tonight and we have one that has a $10k limit and is still open. We dont' carry them around with the intention to use them, they were hidden away -but I don't want my husband stranded somewhere on the highway with no means to get a tow truck, etc. if necessary.

Thanks for your response!

[debbie42]

Thanks bkmaggster - I don't want or plan to charge anything again but we are just now at the point where we can save a little and live on cash - living on one part time income that hopefully will be getting better soon! Point taken about being able to live within our means but we didn't plan our bankruptcy for months/years like some people seem to -we needed to get it done and move forward, so we are doing the best we can.

[bkmaggster]

so we are doing the best we can.

Oh boy, do I hear you on that!!!!

It is rough. We just found out we are probably going to have to surrender our car. (We already surrendered the other one.) DH is the only one employed right now and he had to take a paycut at work. This is not a cakewalk! I really hope your car holds out until things get better for you!

[debbie42]

I hope things turn around for you quick! It seems like all these people stop paying their bills and are able to save tons of money but I am confused about where they put it -you can't have too much in assets or trustees take them away!! We had to rent a house asap so we didn't have too much in savings but now we have NO backup money for anything Without job loss that resulted in this p/t job, we wouldnt have been in this position in the first place!

Ok silly question, what does DH stand for? I see it everywhere and am unclear on why DH=husband?

Take care and thanks for your kind words

[last2cents]

debbie - welcome to the forum.....

DH is message board speak for "dear husband".....

(although it may be debatable sometimes how dear he is! )

DW = dear wife
DS = dear son
DD = dear daughter.....

you get the picture.............

And for what its worth, I haven't made a credit card payment since February....and no, I don't have any extra cash lying around either.

[music12]

you are lucky to still have an open cc. but be aware that they might close it any time without notice.

i have a couple still open. i am using them just to rebuild credit, but i know they can be snatched away any moment.

[biotechsolution]

more than likely since it's a zero balance they didn't get notice of the bk but has soon as they do a soft pull on the account just to check in on you. If it's a major bank about once a month and they will probably close it.

Don't rely on the being open for long and able to be used for emergency.

Major bank cards won't slip through without being closed at some point.

[backtoschool]

more than likely since it's a zero balance they didn't get notice of the bk but has soon as they do a soft pull on the account just to check in on you. If it's a major bank about once a month and they will probably close it.

Don't rely on the being open for long and able to be used for emergency.

Major bank cards won't slip through without being closed at some point.

I totally agree, especially if you put a large charge on it, like an expensive auto repair. These days banks are checking spending patterns very carefully and matching them to other info on your credit report, and once they do the soft pull, they will probably close the card.

[AngelinaCatHub]

At this time, there are many buy here, pay here car places. Yes the interest is high, but, it does not put your bk into a problem. If he has any friend mechanically inclined, perhaps the car could be looked at. I have always been in belief, if it was made by a man, it can be repaired by a man. All things can be fixed. The cost is the problem. There are many junkers that could be gotten and we have one. Got it at auction, for 800. More than the next bid at 100. Oh well. Put 300 into it for battery, alternator, and plugs. That was four years ago. Runs better than my 04 and this is an old police car 93. 'Hub