getting a secured credit card before filing

[bigtim6656]

I was thinking about getting a secured credit card before i file my chapter 7 is that ok or a bad idea. I figure it will start helping my credit now

[jribe]

I was thinking about getting a secured credit card before i file my chapter 7 is that ok or a bad idea. I figure it will start helping my credit now

why get it before you file? You have to include *all* debt/cards in your filing. Just wait until after you're discharged and then get a secured card. Getting it now will in no way help you. It may be worse actually- because they'll show you applied for it, then filed for BK.

It won't help your credit at this point. Just wait.

[jadams]

I don't think it will help, and it would complicate matters.

The funds used to secure the card would be an asset to your BK estate, so it's not as if they would be immune to the Trustee (unless you can exempt them).

But beyond that, there's a good chance that your creditor would close the account anyways when their account review process pulls your credit report and sees the BK filing. Especially if it's very recent to the time of opening the account (i.e. open and BK in the next few months).

Besides getting spooked by the filing in general, they may just close the account to avoid any chance of violating the automatic stay. Or they may be afraid that you'll charge on the card and then the BK trustee will demand they turn over the security funds and they'll have nothing to fall back on.

There have been lots of reports of creditors closing accounts that survived BK years later when a review shows the filing, even though these same creditors would probably have approved an account post-filing.

It would be better to wait until filed, with your deposit money properly exempted, and start an account with a creditor that pulled your credit and is aware of the BK and still is willing to approve the account.

You will not have trouble getting a secured card post-BK. Yes, a few lenders here and there may have issue -- but there *will* be plenty of good banks willing to issue a secured card.

[bigtim6656]

Thanks you said what i expected.
GOing to call the lawyer tomorrow set up my first meeting.
GOing to try and write down all the questions i have tonight plus the creditors One thing that worrys me is i am going to florida for vacation with my parents in late dec or the 1st of jan. I am hoping i can get it all done. But it is going to be the first week of oct before i can file. So where taking half oct nov and dec to get it all done

I don't think it will help, and it would complicate matters.

The funds used to secure the card would be an asset to your BK estate, so it's not as if they would be immune to the Trustee (unless you can exempt them).

But beyond that, there's a good chance that your creditor would close the account anyways when their account review process pulls your credit report and sees the BK filing. Especially if it's very recent to the time of opening the account (i.e. open and BK in the next few months).

Besides getting spooked by the filing in general, they may just close the account to avoid any chance of violating the automatic stay. Or they may be afraid that you'll charge on the card and then the BK trustee will demand they turn over the security funds and they'll have nothing to fall back on.

There have been lots of reports of creditors closing accounts that survived BK years later when a review shows the filing, even though these same creditors would probably have approved an account post-filing.

It would be better to wait until filed, with your deposit money properly exempted, and start an account with a creditor that pulled your credit and is aware of the BK and still is willing to approve the account.

You will not have trouble getting a secured card post-BK. Yes, a few lenders here and there may have issue -- but there *will* be plenty of good banks willing to issue a secured card.

[kornellred]

Your bankruptcy petition will be immediately denied if you did that. In Chapter 7, all of your assets must be liquidated, except allowable exemptions, and a secured credit card definitely AINT allowed.

[AngelinaCatHub]

kornellred is right. Also since it is secured, the security is an asset and would be seized. Even our deposit on electricity was an asset and listed in that schedule. I had to pay it to the Trustee as in all the rest of my personal property I had to purchase back. 'Hub

[falken]

Your bankruptcy petition will be immediately denied if you did that. In Chapter 7, all of your assets must be liquidated, except allowable exemptions, and a secured credit card definitely AINT allowed.

If you can use federal exemptions and no equity you can exempt around $20k in wildcard. The cash used to secure the card would qualify just fine.