Dealing with debt can be incredibly stressful, and managing payments can feel impossible when finances are tight. As such, you may have considered bankruptcy as a solution. If this reflects your circumstances, it’s crucial to understand how bankruptcy proceedings will affect various aspects of your life, including your credit cards. If you are unsure about the consequences of filing for bankruptcy on your credit cards, please continue reading and contact our knowledgeable Gillette Bankruptcy Lawyers for guidance.
Can I Keep My Credit Cards During the Bankruptcy Process in WY?
If you are considering filing for bankruptcy in Wyoming, it’s crucial to understand the management of credit card debt within bankruptcy proceedings. Generally, such debt is classified as unsecured, rendering it subject to discharge contingent upon the selected bankruptcy chapter. In the case of Chapter 7, a liquidation process, assets are subject to seizure and sale to prioritize repayment of secured creditors, who possess collateral. Consequently, residual disposable income may be allocated to the repayment of unsecured debts, though these are ultimately discharged upon the conclusion of your bankruptcy case.
Alternatively, Chapter 13 proceedings entail the consolidation of all debt into a single monthly repayment plan, typically spanning three to five months. A consolidated payment is remitted to the appointed bankruptcy trustee, who subsequently distributes these funds among creditors. It’s important to note that eligible remaining debt will be discharged after the completion of the repayment plan.
You should note that the initiation of bankruptcy proceedings usually results in existing credit cards being suspended or canceled by the credit card issuer. This action is predicated upon the principle that bankruptcy filing constitutes a breach of the contractual agreement with the entity, regardless of the account balance. While the ultimate decision regarding account closure rests with the credit card company, such an occurrence should be anticipated in the event of a bankruptcy filing in Wyoming.
When Can I Apply for a New Card?
Following a bankruptcy filing, you might be wondering how soon you can apply for a new credit card. Securing a new credit card post-bankruptcy presents unique challenges due to the significant negative impact this process has on your credit score. Bankruptcy filings can typically decrease scores by as much as 250 points for those with higher scores and 150 points for average scores. Consequently, credit card issuers are normally reluctant to grant credit to individuals with a bankruptcy history, questioning their repayment capacity.
Nevertheless, obtaining a “rebuilder” card might be an option. These cards usually feature modest credit limits and higher interest rates, yet they serve as a tool to rebuild your credit score through consistent, timely payments. By maintaining a low balance and paying it in full each month, the high interest rate becomes less of a factor, aiding in your overall financial recovery.
At 307 Bankruptcy, we understand how challenging the bankruptcy process can be and the limitations you might face when your case is closed. Connect with our firm today to learn how we can help you navigate the complexities of this process.
