If you are facing excessive debt, you may be interested in bankruptcy credit cards. Bankruptcy can erase some or all credit card debt, depending on which type of bankruptcy you file.
Which Type of Bankruptcy Is Right for You?
In general, individuals who file for personal bankruptcy file under either chapter 7 or chapter 13. An attorney can help you assess which kind of bankruptcy is right in your situation based on your assets and income.
Chapter 7 may be right for you if:
- You don't have any assets (such as a house or investments);
- Your income is limited and is not anticipated to grow in the near future;
- You have excessive unsecured debt such as credit card debt and you are having a hard time keeping up with your obligations.
Chapter 13 may be right for you if:
- You have some assets that are unprotected (such as a home);
- You make pretty good money;
- You are having a hard time keeping up with your debts, but make enough money to pay a monthly payment to your debtors if some of your debt is reduced.
Credit Cards After Bankruptcy
It will take time to build your credit back up after bankruptcy. There are things you can do to strengthen your credit score, and make it easier to secure loans and credit cards even before your bankruptcy is removed from your credit report. The following actions can help you rebuild your credit score after bankruptcy:
- Use credit wisely - you have to use your credit to build your credit score, so getting a credit card and using it wisely can actually build your credit;
- Pay all bills timely - late paid bills, including medical, credit card and household bills, negatively impacts your credit score (if you can't pay on time, it is a good idea to call ahead and make arrangements with your creditors).
- Get your credit report - sometimes it's daunting to deal with finances, but knowing where you stand is the only way you can figure out how to get where you want to be.
- You need two kinds of credit to build your credit score, revolving (such as credit cards) and installment (such as auto or house loans).
Remember, nothing stays on your credit forever. You can take charge and restore your credit even after bankruptcy.
Get Legal Advice
You should discuss your finances with a bankruptcy attorney to find out whether bankruptcy is a good option for you. An attorney who deals with bankruptcy daily will be in a good position to advise you of your rights and the impact bankruptcy will have on your life.
