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Valued Member
sisco
Posts: 34
Registered: ‎07-13-2011
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Secured credit card while still in BK

While still in BK, is applying and receiving a secured credit card considered using 'credit' which is not permitted during the BK phase?

Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010
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Re: Secured credit card while still in BK


sisco wrote:

While still in BK, is applying and receiving a secured credit card considered using 'credit' which is not permitted during the BK phase?


It depends on the type of BK. Usually when in doubt it is best to ask your attorney. All chapter 13 BK must be approved before you apply from my understanding. 

Good Luck
May all your dreams and wishes become a reality!
Valued Member
sisco
Posts: 34
Registered: ‎07-13-2011
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Re: Secured credit card while still in BK

Thank you JM-AM.  Due to time crunch foreclosure I have not been pleased with my choice of BK attorney.  Well, the attorney may be okay but I really wouldn't know because I cannot get past his staff who are quick to answer my questions, which, at times, I've found contradictory from what I've read on the forums and internet searches.  So, this is why I was in hopes of finding a concrete answer on the forum. 

Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010
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Re: Secured credit card while still in BK


sisco wrote:

Thank you JM-AM.  Due to time crunch foreclosure I have not been pleased with my choice of BK attorney.  Well, the attorney may be okay but I really wouldn't know because I cannot get past his staff who are quick to answer my questions, which, at times, I've found contradictory from what I've read on the forums and internet searches.  So, this is why I was in hopes of finding a concrete answer on the forum. 


If you state which type of BK I am sure others will chime in when they know which type of BK you are referring too.....

Good Luck
May all your dreams and wishes become a reality!
Valued Member
sisco
Posts: 34
Registered: ‎07-13-2011
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Re: Secured credit card while still in BK

Thank you for the suggestion. I should have included more information in my original post. I filed chapter 13 and have 1-1/2 yrs left. I want to begin the rebuilding process but don't want to violate any mandates. 

Moderator Emeritus
MarineVietVet
Posts: 14,116
Registered: ‎07-14-2009
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Re: Secured credit card while still in BK


sisco wrote:

Thank you for the suggestion. I should have included more information in my original post. I filed chapter 13 and have 1-1/2 yrs left. I want to begin the rebuilding process but don't want to violate any mandates. 



I believe (could be wrong) that JM-AM is correct by saying that under Chapter 13 you have to get permission to apply for any new credit. BUT I would check with my BK attorney to be sure.

 

 

 

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Valued Member
sisco
Posts: 34
Registered: ‎07-13-2011
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Re: Secured credit card while still in BK

The reason why I asked is that since a secured credit card is using your own funds, would this be considered using 'credit.'  I just wondered if anyone on the forum knew the answer to this.  Thanks.

Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010
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Re: Secured credit card while still in BK

[ Edited ]

sisco wrote:

The reason why I asked is that since a secured credit card is using your own funds, would this be considered using 'credit.'  I just wondered if anyone on the forum knew the answer to this.  Thanks.


A secured card is considered using credit. While you are giving the banking institution funds "IN CASE YOU DEFAULT", in the mean time you are loaned the money and have interest rates and due dates for payments. If you default on the loan then your money is withheld for payment and your account closed.

Good Luck
May all your dreams and wishes become a reality!
Moderator Emeritus
MarineVietVet
Posts: 14,116
Registered: ‎07-14-2009
0

Re: Secured credit card while still in BK


JM-AM wrote:

 

A secured card is considered using credit. While you are giving the banking institution funds "IN CASE YOU DEFAULT", in the mean time you are loaned the money and have interest rates and due dates for payments. If you default on the loan then your money is withheld for payment and your account closed.



Ditto. It's still a "credit" card.

 

 

 

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Moderator Emeritus
beamMEup
Posts: 4,473
Registered: ‎12-31-2008
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Re: Secured credit card while still in BK

I agree with the folks above.  The risk in app'ing for even a secured card without the court's approval is in having your CH 13 dismissed - which you definitely want to avoid.  After your BK is discharged, you'll have plenty of time to rebuild your credit - it wlll come along nicely at that time.  And congrats on doing well on your CH 13 so far - a lot of folks are not able to complete their BK because it's a rigorous program, so you are doing great!

Just puttin' syrup on something, don't make it pancakes.

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