When you file bankruptcy, you are likely to find yourself left without credit cards. This is a strange position for most people to be in. How do you deal with an emergency if you don’t have credit cards? Well, the answer is planning for what most people call emergencies.
In North Carolina, the Chapter 13 Trustees don’t allow you to get into debt, and will only approve cards that are necessary for work or such, and only when you pay it off and don’t carry a balance on it.
Chapter 7 wipes out credit card debt, but sadly you may find yourself being sent credit card applications since the creditors know you are now debt free. The reason they do this is that they realize you are used to making payments each month, and since you aren’t paying anyone else you are probably able to make payments to them! Don’t fall for the offers or you may find yourself right back where you started. You may find that you don’t need them anyway, at least not in the way you used to need them.
Most people think that they want credit cards for “emergencies”, but they really aren’t using them for true emergencies. That is because what most clients call emergencies are not emergencies! When I ask someone to name an emergency, the most commons ones are: house repairs, car repairs or medical treatments. Sometimes it is furniture or new work/school clothes they need.
What people fail to recognize is that these are not emergencies! If you have a house or car, you should expect to have to repair them. If you are a human being, you should expect some medical and dental needs, or that you will need furniture or clothes. The fact that most people don’t budget to cover those expected items is the real emergency, not the event itself. I call most of those things “unplanned for, predictable events.”
So the answer is that in either Chapter 7 or Chapter 13, you may find yourself with credit cards in your wallet, but you need to learn how to live on a cash basis and put money away each month to cover the emergencies, I mean predictable events, that come up in all of our lives.
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