Q: Can I get a new credit card while I am awaiting Ch 7 discharge?
I filed CH 7 bankruptcy in August and I am waiting on discharge. Unfortunately, my new job requires that I rent a car twice in the next two months, which is significantly more expensive with a debit card (For a rental that costs $125, they also require a $343 deposit and although the $343 will be refunded, it is still money that has to be in the account. This is not the case with credit, only debit cards). While I do not want to incur debt, I am also unable to have the funds needed for the holds required to rent a car with a debit card. If I get a new credit card before the bankruptcy is discharged, will that affect my bankruptcy?
A: Yes. There is no prohibition against incurring debt after filing chapter 7. Many car and credit card creditors will actively solicit recent chapter 7 debtors. No, it will not affect your bankruptcy.
If you are currently in a Chapter 7 bankruptcy case, getting a credit card after the filing of your case, but before it is discharged may simply be a matter of going to a credit card clearinghouse website such as www.creditcard.com. You would most like not have a lot of luck finding a credit card that has a good interest rate. The reason is that your credit report will still list all of your debts as due and owing until such time as the bankruptcy court issues the Discharge Order. Once you receive the discharge, your credit reports ( Trans Union, Equifax and Experian) will report each discharged debt as being no longer enforceable against you. The notation on each account should say "discharged in bankruptcy" after you receive the bankruptcy court's discharge order.
If you are in a Chapter 13 bankruptcy case, the court in your district most likely will require that you apply for "leave" or permission from the court to enter into any agreement wherein you will be borrowing money. A credit card that will facilate your renting a vehicle, with a set limited balance, and which is required for employment should be a type of debt that the court will approve. The key is to first file a motion ( or application) with the court that officially makes the request to borrow funds. You should anticipate haivng to appear before the judge assigned to your case at least one time to verify the factual background causing the need for the credit card, and to answer any questions the court may have concering your incurring another debt.
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