01-29-2013 11:38 PM
So interesting story
I have 16 personal credit cards with 90k total limit. I have 0 balance on all cards.
My company failed which I personally guarenteed an business Amex and and a merchant account.
Thus my reason to file chapter 7 bk strictly due to business debt. No chance to pay it off.
I have had 3yrs of paying off all monthly balances on my personal cards every single month.
My question is do I have to reaffirm all 16 credit cards in bk to at lest try to keep them since I have zero consumer debt?
Or do I just leave them alone and see what happens?
Is there any chance I will get to keep any of my 16 cards when bk is discharged?
I have no house or mortgage. All my credit is revolving. Fico is 730 currently.
01-30-2013 04:36 AM
Ask your attorney about reaffirming. Remember, the judge has to approve reaffirmations, if you can reaffirm it might make sense to reaffirm sayyour three best cards.
Your score hit will be reduced because while negatives from before filing remain, you'll have none. Since you won't have discharged any debt on any of these cards (but it may be a problem if you discharged business debt to the same creditor) you may have an easier time regaining accounts..
Most cards monitor BK filings and will shut off even if you don't list them on your schedules.
01-30-2013 12:57 PM
Do you mean keep the cards that I have had the longest with most history?
I apparently have credit with 10 different banks/ lenders.
Citi 3 cards (1 Shell gas) Thank you + America airlines)
USbank 3 credit cards (1 still secured) Platinum + Flex rewards)
Bank of America 2 cards (Platinum Plus + Alaska Airlines)
Chase 2 cards (Sapphire + BP visa)
Barclays 2 cards (Platinum Rewards and Fronteir Airlines Rewards)
Capitol one Platinum
I have 1 past 30 days 6 years ago on a closed account. Perfect since then. In the past 3 yrs I use my cards like a debit card and pay every full balance every month.
Given my list of 10 lenders I have accounts with. Does anyone know which ones would be most willing to re affirm or not close my accounts after BK?
A few of the cards above I havent used yet. I have yet to activate them. Should I wait until after bk to try to activate or does it not matter one way at all?
Amex (platinum) will black list me so I wont be able to get their card again.
01-30-2013 01:10 PM
Since you have zero balance on the cards, I would close the accounts with a zero balance before filing BK. This will look much better to the creditor since you don't have a balance with them. As to the ones that you haven't activated yet, I would NOT activate them prior to filing at all. Call and tell them you want to close the account.
This will put you in much better position after you are discharged because you won't have "burned" those creditors in the BK. Believe me, it is easier to go back and get an account with a creditor from which you had no prior balance after you are discharged.
01-30-2013 01:13 PM - edited 01-30-2013 01:19 PM
so I should close all 16 accounts then since I owe nothing on any of my cards?
I havent burned any of the 16 creditors before. I dont have to list them in BK because no debt is owed according to my laywer. So if i dont owe them anything, how can I burn them?
I know its a unique situation where most people have personal credit card debt when they file bk but I dont have any.
So If I cancel all the accounts before bk. Then after discharge call them up and tell them I want to re open them?
01-30-2013 01:20 PM - edited 01-30-2013 01:25 PM
If you know you are definately filing, then yes. Better to close them prior to filing since they have a zero balance. After your BK is successfully discharged you can contact the creditors again to see which one's will open back up.
I think you will have a tough time reaffirming credit cards in a BK at all - even with a zero balance.
Make sure you keep accurate records showing 1) each account and that it is a zero balance and 2) Closed by consumer by X date (prior to filing).
Naturally talk to your BK attorney about your plan. You have a much better chance of getting the tradeline back if you close it on your own before you file.
The problem with leaving it open, as I see it from my own BK experience, is that even though you owe nothing to the TL, it may be marked iib with zero balance and prevent you from reopening the line for a long time. I know that Chase has a blacklist as well as Amex. Don't take the chance for human error.
Remember, the notification from the BK court to the creditors is actually done automatically - there is a list emailed with the SS# and the name and if it matches the database, then the card is closed iib. Technically the BK court doesn't notify the creditors (except for the suggestion of BK filed on the debt) its a list that the major credit card companies buy of BK filings. That is why I made my suggestion. What do they say? No human involved (its all automatic) That could create a real issue for you.
01-31-2013 03:25 PM
Agree with above. I think your best bet is to close all accounts so it can report closed by customer. If you leave them open and file, they will be closed by creditor or worse, included in BK. This happened to me. I tried to save some accounts and not list them...they all got closed!
Close them if you are sure you will file. Once discharged, hopefully, some will be willing to reopen accounts but this is quite challenging. Most frontline CSR will say "No we can't, you must reapply", which is likely to result in autodenial for most prime lenders. Now perhaps you could recon those on the grounds that you have an excellent history with them, and they should consider your unique circumstances etc...
Curious to see how you play this out.
01-31-2013 03:39 PM
So if I cancel them all. How long do I wait after my bk is discharged to recon them all? What is recon anyhow? Also can I show them documents that all my debt and the reason for filing was for business debt? I am curious to see how this plays out to.
01-31-2013 04:01 PM
another question would be: If i have 5 cards from new banks I have never delt with before, I activate them, make small charges (1-100 per month) and pay them off each month and wait 1-3 months before I cancel then file bk. Would that be worse or the same as never having a relationship with those banks.
01-31-2013 04:43 PM - edited 01-31-2013 04:44 PM
Worse IMO. Since you know you are going to file don't activate the cards and start using them just prior to filing. That could be an issue in your BK even if they are paid off when you file.
The trustee has the ability to claw back each of the payments you made to each of the creditors to turn your case into an asset case. It is not just limited to 90 days although that is the period most frequently reviewed. In my filing the trustee went back a much longer period (all business related too) for everything. Remember the trustees get a bonus if they can find assets in a Ch 7 case. I assume you are filing Ch 7 for your business - right? or is it Ch 11 (or 13). You are filing personally because everything has a PG, right? Expect a little extra scrutiny. Since you have already met with and possibly retained a BK attorney at this point, it could be negatively construed if you activate and start using the cc's now. Don't risk it.
Recon = reconsideration. You do that with a credit analyst if you are turned down for a new line after you are successfully discharged.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on myFICO.com). Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.