Can I Take Out Credit Cards During My Chapter 13 Bankruptcy?

by Rachel Lynn Foley, Esq.

March 23, 2008

Can I take out credit cards during my Chapter 13 Bankruptcy? Short answer, you may not take out any lines of credit either through credit cards or loan applications during your Chapter 13 Bankruptcy. You might think that you will have no opportunities to ever have a credit card again after filing bankruptcy but this just is not true. The Court does not want you to take out credit during a Chapter 13 without permission because the judges want to ensure that you are not going under water by taking on new debt during your case.

Be very aware that you will be flooded with credit card applications during your Chapter 13. You will need to exercise great restraint to not indulge in temptation and apply for a credit card during your case. This will be harder than your think. The credit card companies will use PACER to research who files bankruptcy and then they issue credit card applications to those who have just filed. The credit card companies count on you being weak and feeling restrained by the bankruptcy. They are hoping that if they send enough applications and as the holidays, birthdays and the weekends roll around that you will break down and fill out the application and use the line of credit.

The credit card companies know that you will not be able to discharge the new line of credit unless you wait for 2 years to file another 13 once this case is discharged. That is if you even get a discharge due to the increased accumulating debt from the new lines of credit that you have now taken out. Protect yourself. Do not let the credit card companies prey on your weakness and/or vulnerabilities in your time of need.

Remember knowledge is power and you need to prepare to survive in a Chapter 13. Listen to your attorney and learn to live on a budget. The lesson in a Chapter 13 is just like anything else, you must take one day at a time. It is your life and you need to take financial control.

Be aware, be knowledgeable and be safe!

Written by Rachel Lynn Foley.

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Former Bankruptcy Attorney to the Kansas City UAW: Ford and GM workers, now assisting the general public in Missouri and Kansas with regaining financial control using the Bankruptcy Code. 816-472-HELP (4357).

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