Despite the need to file for bankruptcy, many Americans want to hang onto at least one credit card. This is especially true if you have a card with a low balance or a great interest rate. If you want to keep your card, you may want to reconsider the idea. To keep your card is not always the wise decision. Here is why it is time to take a break from your credit cards when you file bankruptcy.
Creditors May Cancel Your Card
Even if you want to keep a credit card, you may not be able to. Creditors will often cancel your cards when you file bankruptcy. When it comes to bankruptcy, you cannot hide any of your debts or your lines of credit. It does not matter if you do not have a balance on the card. You have to list all of it. When you file, you cannot exclude any of your debts. The bankruptcy itself can void your contracts with the creditor and hence they will cancel your card.
Credit Cards Are Part of the Problem
Remember why you needed to file for bankruptcy to begin with. If you try to keep your credit cards or if you try to apply for a credit card right away then you may end up in the same cycle as before. Credit cards can be handy financial tools. They can help you pay for emergencies and likewise help you to build your credit score. This does not mean that you need to keep your credit cards when filing bankruptcy, however. It may help you to be able to take a break from credit cards.
Credit Card Breaks Can Help
A break from a credit card can be a breath of fresh air after bankruptcy. You have an opportunity to start over. There are a lot of reasons that people rely on credit cards and many reasons why you may have to utilize credit. No matter the reason, once you are out from under your credit cards, you can begin to rebuild your credit score. If you receive a credit card right away, the interest rate may be too high and cause problems in the future.
To get out from under credit card debt can be a refreshing feeling. However, you do want to be careful if you are thinking of hanging onto cards that you owe less on. In general, this is not something that you can do when you file for bankruptcy. The creditor may cancel your card anyway. For more information on bankruptcy, set up a consultation with a credit card lawyer in Clearwater, FL today.
Thanks to The Law Office of Michael A. Ziegler, P.L. for their insight into bankruptcy law and why to get rid of credit cards.