One of the most frightening aspects of a bankruptcy filing is contemplating the way that it will affect your day-to-day life. Will you be able to keep your house and your car? Will people find out and think less of you? And how are you going to be able to buy things if you no longer have credit and don’t have cash on hand??

The last of these questions is actually a pretty big deal. It’s one of the toughest things for people to get used to as they enter this new phase of their lives. Many even think about paying off one card, bringing it to a zero balance and then just keeping the card. This is a bad idea for a number of important reasons.

One of the first things you do when you file for bankruptcy is to submit paperwork to the court detailing every aspect of your financial life. Among the most important elements in this document is the list of creditors to whom you owe money. Not only will this help the court determine your eligibility for bankruptcy, but that list is used to notify all your creditors of your pending bankruptcy. Paying off one of these immediately prior to your filing can be considered fraud, and will definitely be viewed as a prioritization of one creditor over all of the others. There’s a chance that the bankruptcy trustee would claw back the payments that you’ve made to the credit card company.

As scary as it is to think about having to go into a store without your wallet full of credit cards, it is a part of your life after bankruptcy. Part of the credit counseling that you’re required to go through will help you prepare for this reality. If you feel that you must have a credit card immediately, you can ask a friend or family member to co-sign until you get yourself back on your financial feet. You’ll also be able to apply for new credit cards after the proceedings are over. You may be surprised by how many secured credit card options are available to people who are in the midst of credit recovery.

If you’d like to speak with one of our experienced attorneys about filing for bankruptcy, contact us today.

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