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Chapter 13/Secured card advice

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Established Member

Chapter 13/Secured card advice

Hello everyone. I am filing a chapter 13 soon like less than a month away due to debt that im ashamed to lose control of and I am pretty sure to lose all credit cards in the process. I would need a credit card for vacation or I would have to do credit check and may get denied a rental vehicle....need for rental car/hotel deposits, so I was going to open up a open sky secured of maybe $400. Would it be wise to do it before I file Aug 12th, or after? I am going on vacation Sept 28th? Would the card even survive if I file before? Would I get in trouble for opening after? I am aware that noone is a lawyer here, just wanted a slight idea and here some of you all testimony, thank you in advance
Message 1 of 7
6 REPLIES 6
Super Contributor

Re: Chapter 13/Secured card advice

Lets look at this in a way thats not going to look to good to the trustee. Your filing for BK because of debt. So you want to get a Open Sky to rent a car and hotel with $400. Then file in less than a month. Doesn't look good. On the other end if you waited to get the card.. After BK filing you have to get pernission to get more credit. During the Chapter 13 bankruptcy process, debtors are prohibited from applying for new credit cards without the court's approval. Or the trustee asks, you filed for BK and took a vacation before filing? How much did your vacation cost? There's really no win win situation here. If you do get the OpenSky. Then you'll have to include them and risk having it shut down. Maybe someone else has a way. But its going to be tough to explain all this to the trustee. Good Luck!





My posts are JMHO. My siggy is not to brag at all. Just sharing my experiences after learning here from rebuild to recovery after BK DC @ 540's. And to show fellow members what can be accomplished when you do it right and play the FICO Credit Game.
Message 2 of 7
New Contributor

Re: Chapter 13/Secured card advice

Opening anything under $500 is usually fine.  Green dot is a great secured card I used to rebuild for two years while in my last 13.  It was fine and reports to all three.  $39 yearly fee was always a surprise, but its no big deal.  They dont pull credit.  Just require the deposit and that you have a job and checking account I believe.  See the link for the application.

 

https://secure.greendot.com/platinum/registration/sign-up-p1?utm_source=HP-CS-1&utm_medium=InternalL...

Message 3 of 7
Frequent Contributor

Re: Chapter 13/Secured card advice

The conservative approach of FireMedic is correct.  Not a good idea to be running up debt (even small debt) just before, just after or during a Chapter 13. 

 

1.  A secured card taken out before bk means you will have to include the bank account containing the funds securing the card on Schedule B and, unless either fully encumbered or protected by an exemption, will have to be accounted for in the Chapter 7 Reconciliation.   Discuss this with an attny for a further explanation.

 

2. If there is anything owed on the secured card on the day you file, the creditor is listed on Schedule D and the Chapter 13 Plan will have to address how the creditor is to be paid (a secured creditor) - most likely by the surrender of the collateral (the bank account).  Discuss this with an attny for a further explanation.

 

3. Incurring post petition, pre-confirmation, debt normally needs to be approved by the Court.  Post confirmation, such is normally approved by a letter from the Trustee.  This depends upon Local Rules.  Discuss this with an attny for a further explanation.

 

$400 may not seem like a lot and, in the grand scheme of things, it is not a lot, however, you certainly do not want to screw up your case over such a piddly issue.  Discuss what you can and cannot/should not do with a local attny.

 

Des.

Message 4 of 7
Established Member

Re: Chapter 13/Secured card advice

Thank you everyone. I'm not trying to get over it's just alot on my shoulders at this time. I paid the small vacation off in installments but trying to keep up with everything else has taken a toll. This is why I am forced to file
Message 5 of 7
Contributor

Re: Chapter 13/Secured card advice

We just discharged from our Ch13.  You can DEFINITELY pay for this like a hotel OR rental car without using a credit card.  I'd suggest using a second bank account with your travel funds OR prepaid card.  

 

Either way, the rental car company will place a minimum $250 hold on debit cards during your rental period while a hotel will "charge a hold" in the amount of your stay to your debit card.  

 

I did this quite often during our open case, as a traveling consultant.  

Message 6 of 7
Established Member

Re: Chapter 13/Secured card advice

Hey thanks for the response. My thing is....the debit card policy is changing with rentals. If I dont have a credit card, they will do a credit check. If I don't fit their criteria, they will deny the rental
Message 7 of 7
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