How to Keep a Credit Card Out of Bankruptcy in New York City?

Many clients in Manhattan that have had a financial crisis like job loss or a medical emergency can find themselves relying on credit cards to pay the bills.  Without a cushion of savings or help from family members most people in this situation will max their credit cards out in a matter of months.   Bankruptcy protection is usually the best way out.  It will eliminate the toxic debts that got you into financial trouble in the first place along with the credit card bills you racked up to bail yourself out, but bankruptcy won’t allow you to pick and choose the debts that go into the process.  In other words, if you file bankruptcy in New York City you won’t be able to keep just one credit card out of your case.  At the end of the day the decision to keep your account active will be up to each credit card company, but all of your credit cards will have to be included on your petition.

If you have a card that hasn’t already been maxed out, it only makes sense to want to keep this line of credit open in case of emergencies.  Many clients believe if a card has a zero balance then it will be safe in bankruptcy, but unfortunately you will likely lose this line of credit as well once the card company learns you have filed bankruptcy. Credit card agreements explicitly state their credit lines will be closed if you file for personal bankruptcy.  Now this doesn’t mean you should run out and max up this card as well before filing.  In fact as an official debt relief agency as defined by the US Supreme Court we cannot encourage you to incur more debt right before filing bankruptcy.  Doing so might get you into some trouble with your bankruptcy anyway.

The thought of living without a credit card can be frightening but it shouldn’t keep you from seeking the advice of a bankruptcy attorney.  If you are already underwater on your bills bankruptcy may be your best option, and with the help of an attorney you will be able to more easily handle the loss of your last credit line.  On the good side remember that your spouse’s cards will not be affected by your bankruptcy, you will still be able to use debit cards and secured cards, and many of our clients are offered new credit cards in about 15 months after their bankruptcy discharge.  Access to credit cards after bankruptcy is easier than most clients realize, but with all of your debts eliminated in your discharge you may not need them again at all.  Instead of throwing your hard earned money after high interest credit card debt, you will be able to apply this money towards smart investments and the things you really need.

If you are using credit cards to survive think about arranging a free consultation with a bankruptcy attorney.  It can’t hurt to get a better understanding of your financial options.  If you live in New York City contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free consultation today.  We only practice bankruptcy law and maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 8/31/16.


**** DISCLAIMER:  This article is intended for educational purposes only.  By reading no attorney-client relationship has been created.  Prior results do not guarantee a similar result for future clients