Credit Cards After Bankruptcy

Many bankruptcy clients have asked me if they should reaffirm one or more credit cards during their bankruptcy. As alternative to reaffirming a debt, the clients could pay off a small credit card balance before filing and not list the bank as a creditor. I always explain to people that it rarely makes economic sense to reaffirm credit card balances which could be discharged in a Chapter 7 bankruptcy because the bankruptcy debtors will get new credit card offers in the mail soon after they file bankruptcy

There are subprime credit card lenders who seek out bankruptcy debtors as new customers. The interest rates are high, but the cards are available. For example, First Premier's credit card offer. 29% is the standard interest rate, and 39% is the default rate, plus other charges. The interest rate is not a problem if recent bankruptcy filers become disciplined to pay off monthly balances after all other unsecured debts are eliminated in bankruptcy.

posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida