I’m Filing for Bankruptcy But What Happens to My Credit Cards?
Many folks have concerns involving bankruptcy, one of which is if they may keep using their credit cards after declaring bankruptcy or not. When you’re in debt, it may be tough to figure out how to manage your home, and using lines of credit to help make ends meet might seem enticing.
It’s crucial that you understand when you should stop spending on your credit cards before declaring bankruptcy and what to do with them during your bankruptcy proceedings. Here’s what you need to understand.
Am I Allowed to Use My Credit Cards Before Bankruptcy?
Although you may use lines of credit while in bankruptcy, the question is whether you should. Putting purchases on your credit cards before declaring bankruptcy could potentially result in major repercussions. While some credit card debt can be dismissed via a Chapter 7 bankruptcy, creditors may challenge the cancellation of charges incurred soon before filing for bankruptcy.
Why You Shouldn’t Max Out Your Credit Cards
Buying unnecessary costly items or services, or buying items worth $725 or more inside of 90 days after declaring bankruptcy, is considered fraudulent. The credit card company has the right to oppose debt forgiveness, but the borrower will have to prove that their transactions were legal and not fraudulent.
If the lender wins, the debt will not be dismissed. If you’re planning to declare bankruptcy, don’t take on any additional debt you can’t realistically afford since you might not be allowed to get it dismissed.
Can I Halt Credit Card Payments Since I’m Going to File For Bankruptcy Anyway?
Discontinuing credit card payments is usually not a smart choice unless you are confident that bankruptcy is the best choice for you. If you fail to make payments on your cards and then decide not to declare bankruptcy, you will face penalties to your credit score and potentially even legal consequences. You may, however, stop paying your credit card bills if you know for absolute certain you’ll be declaring bankruptcy. This is typically the case even if you won’t be filing right away.
When to Call a Florida Bankruptcy Attorney for Assistance
You should reach out to an attorney as soon as you begin to experience financial difficulties. The sooner an attorney can get involved, the easier it will be to help you. Contact the experienced Florida bankruptcy lawyers at Caplan Bankruptcy now for a consultation by dialing 407-872-6249.