Using new cards just before filing.

[BBW]

First I want to say I'm sorry for posting so many questions in such a short period of time. But as I learn more I will do my part to give back my answering others questions.

I've recently applied for some new cards (walmart, bestbuy,macys) who have issuers that I will not be discharging. My hope is the more zero balance cards I have the more likely I will be able to keep some of them. So I've just got these cards and I really should use them so they don't cancel the accounts which is what they will do if I don't try to use them for a few months. Macys did this to me a few months ago.

So is it alright to charge say $10 ea, pay it and not list them when filing since they would be paid off and the preference payment is only $10??? Is that legal? Would trustee find out or care? I'm just trying to have as many tools as possible for when I rebuild my credit.

[mamaluv]

More than likely they will find out about your BK and close them anyway....regardless of having a 0 balance. I had quite a few 0 balance cards...none of them survived.

[mike258]

As long as the account has a zero balance on the day you file, you do not have to list it on your petition.

You are filing bankruptcy. Why do you want to keep any credit cards? My advice...get through bk first, rebuild after discharge. Once you are discharged, you can easily open up a secured mastercard at a credit union to help you rebuild. That's all you need. A year after discharge, get an unsecured account or two.


Do not expect ANY account to survive bk...ones that do are few and far between...and usually get closed when the issuer does an account review and sees that you filed for bk. Check the card agreement from any issuer. Every single one says that you are in default if you file for bankruptcy...whether you include them, or not.

[justbroke]

I've recently applied for some new cards (walmart, bestbuy,macys) who have issuers that I will not be discharging. My hope is the more zero balance cards I have the more likely I will be able to keep some of them. So I've just got these cards and I really should use them so they don't cancel the accounts which is what they will do if I don't try to use them for a few months. Macys did this to me a few months ago.

You will need to list all your creditors on your petition. It's a 99.99% chance that all your accounts will be closed because of the Bankruptcy, regardless of whether you listed the account or not.

Since you know that you are insolvent, and visiting bankruptcy forums and may have even talked to a BK attorney, you shouldn't even be thinking of using a credit card.

So is it alright to charge say $10 ea, pay it and not list them when filing since they would be paid off and the preference payment is only $10??? Is that legal? Would trustee find out or care? I'm just trying to have as many tools as possible for when I rebuild my credit.

I am just going to say this flat out. No. It is not okay. While it's only $10 and not "that much", I take the path of least resistance.

It reads like you just want to charge in order to keep the cards. You need to think differently. You are filing bankruptcy. Don't worry about cards. You'll probably lose them all anyhow.

If it's credit that got you into this mess... why would you perpetuate it?

[leena]

I agree with JustBroke. Forget about credit cards! A scary number of people end up filing again. If it's on medical bills, that's one thing. You cannot control everything. But credit cards?? Nope, never.

[BBW]

If it's credit that got you into this mess... why would you perpetuate it?

Well it's certainly not credit that got me into this mess. Credit encompasses all loans. The continued use of credit cards after my significant other quit working full time to raise our daughter, got me into this mess.Compounded with banks doubling rates because of the economy. I have no interest in using a credit card. But I know I can't rebuild my credit without them. I need to buy a car post discharge, want to buy a house in a few years, etc etc. And I've been obsessed with raising my credit score since I was 18 and discovered I couldn't just go get a loan because I had a good job.

[BBW]

As long as the account has a zero balance on the day you file, you do not have to list it on your petition.

You are filing bankruptcy. Why do you want to keep any credit cards? My advice...get through bk first, rebuild after discharge. Once you are discharged, you can easily open up a secured mastercard at a credit union to help you rebuild.

Do not expect ANY account to survive bk....

As I said in my post above I don't plan on using credit cards in the future except for a small annual purchase to keep the account open. I do plan on using them to buy online for security reasons and I am to lazy to use prepaid cards. Or for renting a car or hotel room since if you use a debit card they put hundreds or thousands on hold for up to 30 days.

I don't except any accounts to survive. If I did I already have 3-4 without balances, but the way I see it is the more I have the greater my odds of keeping at least one.

I do plan on getting a secured card from a credit union as soon as I have a few hundred bucks after filing. But one card alone will not help. The more open trade lines (accounts) you have and the higher the available limits the higher your score. There are a lot of other factors but those two are important.

And a small difference between a 599 and a 600 score is the difference between being approved or denied for a mortgage. Or can cost thousands more in interest on an auto loan.

[justbroke]

Well it's certainly not credit that got me into this mess. Credit encompasses all loans. The continued use of credit cards...

So, you're saying it's credit. Got it.

Suffice it to say that once you file Bankruptcy, you'll get a clean slate. You will need to start rebuilding that credit. However, don't let it (credit) consume you. Many people think of themselves as their FICO score. People with high FICOs use it as a badge of honor (I'm an 825, what's yours?).

[BBW]

I agree with JustBroke. Forget about credit cards! A scary number of people end up filing again. If it's on medical bills, that's one thing. You cannot control everything. But credit cards?? Nope, never.

As I said in my last two replies. I have to interest in using credit cards on a day to day basis anymore. But society as made them a necessary evil. Even if I wanted to I am going to be discharging every big bank except for wells fargo and hsbc so I won't have much to use anyway.


Oh and as far as the replies about 0 balance cards not making it that is also due to the issuer being the same. For example citi issues my sears,exxon, and homedepot cards. So I know even with a 0 balance those will be gone. But my local banks credit card, a visa issued by federated department stores bank, etc might possibly make it if they don't do an account review.

[justbroke]

But my local banks credit card, a visa issued by federated department stores bank, etc might possibly make it if they don't do an account review.

Actually, this is not how the majority of what I'll call sophisticated creditors find out.

There is an entity known as the Electronic Bankruptcy Noticing (EBN) Center. They are responsible for sending out all the wonderful mailings from the U.S. Bankruptcy Court (both paper and electronic). Court orders, notices of bankruptcy, and other papers flow through this system daily.

One of the major subscribers to the EBN are the CRAs as well as the sophisticated creditors. Your creditor usually finds out through one of 3 ways. First, they find out from the mailing from the EBN (the Notification of Bankruptcy). Second, they find out from the CRA if they "subscribe" to real-time events. Third, they find out directly from the EBN because they subscribe directly to the EBN.

In most cases, sophisticated creditors know of your Bankruptcy the night you file! The EBN sends the updates overnight and all the sophisticated creditors would have shutdown your accounts before the sun comes up the next day. I know this personally as this happened to me on a line of credit from my Bank where I had no other credit products, and it's not any of the big banks!

I'm just concerned with your fixation on credit. I need credit "daily" as I travel (fly, take trains, cabs, hotels every week), and I don't have ONE CREDIT CARD. I use one of 3 bank issued debit cards. I'm only suggesting that you learn to live with cash. I don't think of you any differently for wanting a credit card -- God knows that I want one -- but I'm learning.

[BBW]

However, don't let it (credit) consume you. Many people think of themselves as their FICO score. People with high FICOs use it as a badge of honor (I'm an 825, what's yours?).

You do make a point. I think in the past I have let it consume me. Although I don't think anyless of myself for having a 680 I was happy with myself when it was higher. I have always signed up for credit monitoring and if my score dropped a little I would get annoyed. I had a spreadsheet to keep track of limits and when I was last approved for an increase so I could ask for another in 6 months, which got me to a 760 score (former badge of honor) even when I had tens of thousands in debit .Which is not how I got into this mess but it is how I got so deep. If I didn't originally have $200k available and had 3 cards that totaled $10k limit I would have been fine. But then again why would banks give me so much credit? I had $75k available from amex alone. That's more than I make in a year.

I've seen hundreds of peoples credit reports and while it is possible I have only seen an 820 once.

I think going forward once I get back to a 700 I'll be happy (2yr goal).

Thanks for all the replies.

[mike258]

Don't forget about garbage collectors like Lexis-Nexis. Many creditors use their services to find out about bankruptcy filings.

[BBW]

In most cases, sophisticated creditors know of your Bankruptcy the night you file! The EBN sends the updates overnight and all the sophisticated creditors would have shutdown your accounts before the sun comes up the next day. I know this personally as this happened to me on a line of credit from my Bank where I had no other credit products, and it's not any of the big banks!

I'm just concerned with your fixation on credit. I need credit "daily" as I travel (fly, take trains, cabs, hotels every week), and I don't have ONE CREDIT CARD. I use one of 3 bank issued debit cards. I'm only suggesting that you learn to live with cash. I don't think of you any differently for wanting a credit card -- God knows that I want one -- but I'm learning.

Thanks for the info. While I do consider myself an expert on credit, from my personal obsession and my job. But I know very little about bk credit except how hard it will be to get approved for a good rate. I was hoping my bank which is not a big bank wouldn't find out. But I guess if it happend to you it can happen to me.

I don't need to use credit daily. But the idea of not having it makes me twitch. I am currently using only debit cards and cash which is very limited since I continue to pay my credit cards as to not get any lates that will lower my score (lol). In fact I have my sister sending my one of her cards just in case I have an emergency.

[BBW]

It's hard when for 8 years every dollar I've spent has been on a card. Had I used cash I would have found out sooner what I could and couldn't afford.

[justbroke]

It's hard when for 8 years every dollar I've spent has been on a card. Had I used cash I would have found out sooner what I could and couldn't afford.

I think that's the true lesson, and I think you have learned it.