Are you drowning in debt and thinking about filing for bankruptcy, but worried about the consequences to your credit? Do you have a low interest credit card or are you concerned that you may not be able to obtain a low interest card following a bankruptcy?
If you have concerns, they may be founded. However, often the benefits of a personal bankruptcy outweigh the negative effects on your credit. Low interest credit cards and credit lines are appealing to people, because they end up saving money on large debt. Additionally, they often allow people to transfer credit lines for reduced costs.
Nevertheless, you should know that if you file for Chapter 7 or Chapter 13 bankruptcy, you would likely not qualify for low interest credit lines for at least seven to 10 years, until the bankruptcy is removed from your credit report. In the meantime, there are things you can do to rebuild you credit while you are awaiting a bankruptcy to clear:
- Find a credit card that fits your needs by limiting purchases
- Look into secured cards, which allow you to make a deposit on a line
- Pay your balance off and/or reduce it as much as possible each month
- Avoid applying for multiple credit cards at once, as multiple credit checks can hurt your credit score
What Are the Benefits of Personal Bankruptcy?
While it may be hard to find low interest credit cards following a bankruptcy, it does not mean that a debtor should avoid a Chapter 7 bankruptcy, as it allows borrowers to eliminate financial burdens like medical bills and credit card debt.
If you are interested in a Chapter 7 bankruptcy, you should be aware that you must be able to pass a “means test” that examines your income and helps you decide if you would be able to afford a payment plan agreed upon through other forms of bankruptcy. Remember, if you are unable to file for Chapter 7 bankruptcy because of eligibility issues, you can always file for Chapter 13 bankruptcy.
If your credit card debt is causing you financial stress, contact our Washington DC and Maryland bankruptcy lawyer today for a consultation. You can also visit our Facebook page, our LinkedIn page, our Google+ page or our Twitter page for more information.
Law Firm of Kevin D. Judd – Maryland and Washington DC bankruptcy attorney
Judd’s Judgment: The average American household had $15,611 in credit card debt in 2014.