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Secured Credit Card 90+ Days Before Filing

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    Secured Credit Card 90+ Days Before Filing

    Background: I've been visiting the forum on and off for months already because I'm pretty sure I'll be filing for Chapter 7 in the future. I had a bunch of credit available and I've watched our out-go exceed our in-come for months. We're already sinking and I know we're going under. It's time to prepare for the inevitable and I'm on the verge of the 90 Day no-charge no-pay program.

    The problem is this: I don't need credit but I need a credit card. My job requirs me to make purchases at times and get reimbursed later. I'm not able to change this arrangement by much and still hold my position so I need to plan.

    I like the idea of a secured credit card and I've found the best one at Digital FCU. I'm thinking that I should open an account right now and make a deposit ($500 or so) to get the card using the collateral. I'd like to keep this card through the 90 Days and charge expenses to it related to work. When I file, I'd also like to keep my acount with the credit union and keep this card after filing too.

    Even if the amount of the secured deposit is an asset that I need to surrender and then re-deposit again, I think it's justified and worth the expense. (Why complain about $500 when I'll have thousands of debt eliminated?)

    This card is important for my job and it it'll help me protect thousands of dollars of income I receive from my employer. I'd also like to think that it will help my credit score later on and be the basis for starting over.

    Can this work? Will this card need to be listed? Will the account get closed even if I don't want it to? Is there a better way?

    The other plan invloves Visa Gift Cards. I know I can deposit money and have a card that way. These cards can only hold a limited balance for a limited time before they start taking money away and they do nothing to re-build credit. I know I can do the Gift Card route but it's much less appealing!

    Help!
    Last edited by Keebler; 06-03-2007, 11:56 AM.
    Discharged November 2008 100 days after filing no-asset Chapter 7. We intended to let a two-year-old vehicle go back to the bank and reaffirm an inexpensive ten-year-old SUV and our home mortgage. In the end we surrendered ALL of our vehicles and reaffirmed NOTHING. We'll "ride through" our mortgage after the court ruled it an undue hardship.

    #2
    Keebler, I would be pretty careful about using any kind of credit, even if it is a $500 secured card. IMHO, instead of securing a line of credit that will charge interest (regardless if you're being reimbursed by work), why not just take $500, open a separate savings account, and get a debit/ATM card? It will work the same way as a credit card, and you don't run the risk of accidentally breaking the 90+ day rule.

    Regardless, I think this would be an excellent question for a BK lawyer who is familiar with your local nuances. I'd contact one ASAP if you haven't already. It should be free for a consult, so why not use that as the chance to ask the question as well?
    Filed Ch 7: 12/27/07
    341: 2/6/08
    Discharged: 4/11/08
    Finally closing: ???

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      #3
      Runnin on Empty gave you a good suggestion. A seperate acct that offers a Debit Card is a MUCH better option. It's not Credit. Credit use immediately prior to and during BK is a big "No, No".

      Just be sure to check your Exemptions. You wanna be sure you'll have enough Exemptions to cover the $$$'s in that acct.
      Filed Ch 7 - 09/06
      Discharged - 12/2006
      Officially Declared No Asset - 03/2007
      Closed - 04/2007

      I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.

      Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

      Comment


        #4
        What you're talking about doing could raise a red flag as a preferential payment. You'll have to use a debit or pre-paid card.

        Comment


          #5
          western union has a great pre-paid card that has your name on it....its rechargeable and as far as I can tell, not really trackable if you load it with cash. This was the card with the lowest fees I could find. You apply online and they send the card in 3 days. You then bring it in to western union and load it
          Chapter 7 Pro Se....Discharged Feb. 2006

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