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Working With A Bankruptcy Professional

A few years ago, when I realized that I couldn't pay my mortgage anymore, I knew that I needed to do something to correct my finances. It seemed like I just couldn't catch a break, and after losing my job, I knew that I was in trouble. I started looking for new work, but I knew that I needed to fix my credit somehow. I was at the end of my rope, until a friend talked with me about the possibility of declaring bankruptcy. She explained that it helped her to start over. I met with a bankruptcy attorney who was incredible to work with, and I was amazed at how much it helped my situation. Check out this blog to learn how working with a bankruptcy professional could help you.


Working With A Bankruptcy Professional

Considering Bankruptcy? Be Careful With Your Credit Use

by Roël Schiks

Credit cards are relatively easy to acquire and use, but it can be challenging to pay what is owed. The ease of use has contributed to many consumers having to file for chapter 7 bankruptcy. Once a consumer's credit card balance climbs, the minimum payment each month may be difficult to meet. However, if you are planning to file for bankruptcy, how you handle your credit card use beforehand can affect your ability to obtain a financial fresh start. To understand more, check the vital facts below.

Can You Include Credit Card Debt in Your Bankruptcy?

Almost all creditors employ annoying tactics to collect debt, including phoning you, texting you, sending you mail, and more. Once you file for bankruptcy, though, all of that should come to an immediate end. Also, thankfully, almost all credit card debt can be listed and forgiven with a chapter 7 filing. Be sure you include every creditor when you fill out your bankruptcy paperwork, though, since only the accounts you list are eligible for discharge.

Can You Use Your Cards Prior to Filing?

The answer is yes, but be careful. Creditors may take note of your credit card use in the months before you file to determine whether you are racking up debt on purpose. For example, if you are using your available credit on a card in certain ways, the creditor might accuse you of fraud. This fraud accusation usually involves filers running up the balance on their credit cards because they know the debt is about to be included in a bankruptcy filing and will be forgiven.

How to Handle Credit Card Use Before a Bankruptcy Filing

You can still use your card in many cases if you do so with care. Use the following tips to avoid issues with your credit use:

  • Many consumers are in dire financial circumstances prior to a chapter 7 filing, and that can mean using credit cards to pay for many things. You may need to buy groceries, fuel for your vehicle, clothing for your child, utilities, and more. If you must use your credit card for those necessities, do so. Be ready to show what you used the card to purchase and don't use it for what might be seen as frivolous reasons.
  • You can also use your card to take cash advances, but you must stay under the limit and use the money for necessities. If you exceed the limit, even if you used the money for an emergency vehicle repair or other important reasons, the bankruptcy court might nullify that charge – leaving you to pay the creditor.

The best way to avoid problems with your credit when you file chapter 7 is to consult with and work closely with a bankruptcy attorney.