A common question during bankruptcy is whether an individual can continue to use their credit card(s) when they file for bankruptcy. It can be difficult to take care of your household while being overwhelmed by debt, and using credit cards to support your family may be tempting. It’s important to know when to stop using your credit cards, like before filing for bankruptcy, and what you should do with your cards as you go through the steps of the bankruptcy process.
Is It Possible to Keep Using My Credit Cards?
While you can still use your credit cards during a bankruptcy proceeding, the bigger question is should you. Using your credit card(s) before filing might have major negative effects. While credit card debt may be discharged through a bankruptcy, a creditor might object to the discharge of particular charges right before declaring bankruptcy.
Can I Have a Maxed Out Credit Card?
Purchasing extravagant items or services that aren’t a necessity, or buying goods or services valued at $725 or greater within 90 days prior to filing for bankruptcy is assumed to be fraudulent. The creditor can object to the debt being terminated, but the debtor, not the credit card company, will need to prove that the charges were legitimate and necessary. The debt will not be discharged if the creditor wins. If you know you’re going to file for bankruptcy, don’t take on anymore debt you can’t afford to pay back, because you may not be able to get your debt discharged.
What Happens If I Stop Paying My Credit Card Bill?
It is typically not a good idea to stop paying your credit cards until you have discussed your financial situation with a professional. If you avoid paying your credit card, and later decide that you don’t want to file bankruptcy, you could suffer legal and credit reporting penalties. If you’re confident you’ll be filing for bankruptcy, though, talk with a lawyer to establish a plan moving forward.
We understand that every bankruptcy case is different, and we will work hard to help you put together a plan so that you can get back on your feet and one step closer to a debt free life. If you are thinking about filing bankruptcy, Castle Law Office provides a free consultation for Missouri and Kansas residents. You can call us at 816-842-6200 or you can email us and set an appointment with a Castle Law Office Attorney to discuss your options.