Q: I want to rebuild my credit while in Chapter 13. Is it ok to obtain a secured credit card?
A: Not without permission of the chapter 13 trustee in your region
A:
Although there is no prohibition on obtaining a secured credit card, you are putting the cart before the horse. The real problem is that you cannot obtain credit while in a Chapter 13 case without Bankruptcy Court approval. No lender is going to lend you money until you complete the Chapter 13 case. Also, it is very easy to convert to Chapter 7 and most lenders are going to be leery of lending you money until you obtain your discharge.
Most lenders look only at post-discharge actions when you are trying to obtain credit. Remember that you have not borrowed money for 3-5 years. Once you obtain your discharge, you can start rebuilding your credit. Most of my Chapter 13 clients find very little trouble with their credit once they finish the Chapter 13. Even while in Chapter 13, you will have light bills, insurance bills etc and those are used to reestablish credit all the time.
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