Confused about credit cards that are NOT included in our BK

[debbie42]

Hello all, I am new to this forum and have already found great comfort in reading lots of people's questions and the answers other gave. I have a question I am not getting a clear answer on from anyone, including attorneys (my BK attny. as well as friends who are other types of attorneys).

We have several store and VISA/MC credit cards that are empty and not included in our case. I want to know when it is "safe" to use them again-we intend to start using some right away and paying them off every month to start building credit back up. Our attny. is filing our case next week. So is it safe to use them after filing, going to court or after actual discharge?

I know there's a great chance many or all will get closed at some point, so I am hopeful to start using a few sooner rather than later-so that the banks see we are paying in full eahc month and may leave them opn for us..is this a realistic possibility?

Thanks for your help!

[MSbklawyer]

I don't even know where to start.

The moderaters won't let me use profanities, so without them, I am completely at a loss for words.

[backtoschool]

Hello all, I am new to this forum and have already found great comfort in reading lots of people's questions and the answers other gave. I have a question I am not getting a clear answer on from anyone, including attorneys (my BK attny. as well as friends who are other types of attorneys).

We have several store and VISA/MC credit cards that are empty and not included in our case. I want to know when it is "safe" to use them again-we intend to start using some right away and paying them off every month to start building credit back up. Our attny. is filing our case next week. So is it safe to use them after filing, going to court or after actual discharge?

I know there's a great chance many or all will get closed at some point, so I am hopeful to start using a few sooner rather than later-so that the banks see we are paying in full eahc month and may leave them opn for us..is this a realistic possibility?

Thanks for your help!

Using the cards will be a red flag on your case. You could charge necessities in small amounts, but if you pay more than the minimum balance on the cards to pay off those purchases, you will be giving preferential treatment to those cards and will have your payments called into question in your bankruptcy case.

The cards will most likely be closed anyway, even if they have zero balances. Very few cards survive a bankruptcy petition. I have never heard of a visa or mastercard or amex surviving. Occasionally small store cards that have zero balances survive.

I am very surprised your lawyer didn't tell you any of this.

[debbie42]

Well, thanks for your help MSbklawyer...this is all new to me and I am looking for advice, not someone to make me feel bad.

[debbie42]

Thanks backtoschool-I haven't talked to my lawyer often-just paralegals and legal assistants who don't seem to know much. Met the actual attny. only at initial consultation. I am not really talking about picking and choosing, I am just wondering when I am considered "done" enough to use any cards that happen to make it through-I realize many or all will not, but even if just one store card does, I would like to use it and pay it off to start getting back on our feet.

[backtoschool]

I would just consider all your cards closed at this point. Your visa and mastercards won't survive. You can start rebuilding your credit right after your discharge by getting a secured visa, etc.

[backtoschool]

Thanks backtoschool-I haven't talked to my lawyer often-just paralegals and legal assistants who don't seem to know much. Met the actual attny. only at initial consultation. I am not really talking about picking and choosing, I am just wondering when I am considered "done" enough to use any cards that happen to make it through-I realize many or all will not, but even if just one store card does, I would like to use it and pay it off to start getting back on our feet.

I totally understand. A few of your store cards may survive. I wouldn't use any cards until discharge. It will keep your case simple and clean.

[AngelinaCat]

Hello Debbie: Welcome to the Forum.

To answer your question quickly: please assume that any and all credit cards or credit accounts you may have anywhere WILL be closed.

You need to list all that you remember, and are on your credit report in your BK paperwork prior to filing.

EXAMPLE: We, 'Hub and I, listed all the cards we knew of. There were two.

What turned out to BE an issue was a card from Sam's Club. They posted paperwork after we filed BK wanting to be kept in touch with the progress of our case. Why? It turned out that this Sam's membership card that I had just to get into the store, had a credit line on it that I did not know about. This card had never been used as a credit card--only as a tool to get a discount to get in the door. This card had never been renewed since January 2004, and we filed in December 2007. Once we explained this to the person on the Customer Service side of that card, withdrew their complaint, and that was that.

Now, having said all that, once we filed 12/28/2007, and had our 341 on 2/7/2008, 'Hub went and opened a small account at Lowe's, and a small account at Radio Shack. These were new debt incurred after the 341, and we should be responsible for. And planned to be. However, when we went to pay them in person at the actual stores, these stores had no record of our accounts or purchases AT ALL. PERIOD.

We found out that Radio Shack and Lowe's accounts are owned by a parent company that owned our other CC accounts, and ALL were closed.

I do NOT in any way suggest this as a scenario to follow; I am just telling how it happened to us.

My Best~~~

[StartingOver08]

I would be very surprised if any of your cards survive the filing.

You certainly would not be able to charge at all during the BK process. Once you file, the BK shows on your credit report right away. Most of the larger cc co's have a service they subscribe to that shows the new filings daily so the credit card co's can send out the notices to the debtor that the cards are closed, if there is a zero balance at the time of filing. Of course, if you have a balance at all, it is to be included in the petition and will be closed instantly.

[AngelinaCat]

Hi Debbie: I said it in a very long-winded way, and others have been more succinct. So I will NOW say:

Take all credit cards of any type and cut them up and burn them. That way you are safe.

[HakunaMatata]

Thanks backtoschool-I haven't talked to my lawyer often-just paralegals and legal assistants who don't seem to know much. Met the actual attny. only at initial consultation. I am not really talking about picking and choosing, I am just wondering when I am considered "done" enough to use any cards that happen to make it through-I realize many or all will not, but even if just one store card does, I would like to use it and pay it off to start getting back on our feet.

I understand you'd like to be proactive; although, the courts frown upon recent credit card activity. I was informed by three consult attorneys to cease credit card activity immediately (I haven't filed yet). I have one card that was used for years and paid off monthly. If I were to continue this pattern, my payments would be deemed preferential (giving more money to one lender than another simply by paying off the card monthly). I have plenty of available credit on cards with no balances and no recent activity. It's highly unlikely these cards will exist post-BK (including the smaller store cards since they are commonly tied to large lenders).

There is a wealth of information in "Rebuilding Credit" you may find useful as there are many steps you can take following BK to improve your score. Yes, your credit score will initially plummet. Thankfully, this isn't indefinite. Maintain your proactive stance...just delay it until after you're discharged.

Best of luck to you!

[debbie42]

Thanks to all for your advice! I will say that our lawyer only had us list the cards in the BK that had balances. He said empty ones do not get included. As a result of our (up until about a month ago) super high credit scores -I have LOTS of cards I never even called to activate, just sitting in a file. I will try to forget they exist for a few months and after the discharge I am sure I will call to see if they're openjust out of curiosity

I believe it that they will all get closed eventually, just trying to avoid the whole secured card route if at all possible.

[AngelinaCat]

The ones that have never been activated should not be a problem. Just the ones currently in use. Though this did not stop the Sam's Club people from nailing us.

[justplaintired]

Ever card we had, even the ones we had no balance on were closed. Not because we asked, but because of our credit. I would say most likely all will be closed for you also. I have read on here where a few survived for others, but that isn't the norm. Your best bet is to cut them up as others have advised to you. Better to not be charging so soon after filing BK. Might cause you more difficulty in this process and not to be cruel, because I do understand some are more concerned about their credit score then others, but cc so soon just might not be such a great idea. Give yourself time to live on a cash only basis. It is a good lesson to us all. And a challenge but rewarding in many ways.

Good luck!

[teerx79]

Zero Balance Cards

I filed BK mainly because my ex wasn't able to get house, vehicles and other marital loans refinanced. She stopped paying and creditors came to me.

With that said, I filed Chap 13 and am paying back $400/month for the next 5 years for a credit card of MINE. I have two other credit sources, Sam's Club and an HSBC, both with zero balances.

The Paralegal told me since I wasn't including my 2008 Nissan Titan in the discharge, I had about a week to secure a replacement vehicle. I was planning on keeping my 2 previously mentioned lines of credit, so I bought a 6 year old car with the zero balance HSBC @ 14 % interest. I had planned on paying $600 month until the balance was paid.

Now comes a letter from USAA on the repo and the truck will sell at auction and I am responible for the difference between the loan vs what the truck will bring. Also, lurking with the repo letter was another from the BK court that the papework filed by the attorney was done incorrectly.

So now I am freaking out. The truck value is $8000 less than the $20k I owe, my Sam's Club and HSBC credit have been cancelled, the EX refuses to reimburse for legal fees she owes me, her two vehicles are still in my name that SHE is still defaulting on, and yes I took her back to court for contempt and spent thousands of dollars to get the reply, she doesn't have any money. (funny thing, she is an RN and had always cleared over $90k a year)

I have $1000 to my name and work 48 hours a week as a paramedic. I am tired of being screwed over by attorneys, the EX and would welcome that long plunge off the Sunshine Skyway Bridge....................