Can I Apply For Credit Cards After Filing for Bankruptcy?

If you’re considering filing for bankruptcy in Alabama, chances are your credit has already taken a hit and isn’t where you’d like it to be. While filing for bankruptcy will further impact it, and remain on your credit report for anywhere between seven to 10 years, you may still qualify for credit cards in the future.

How difficult is it to get a credit card after filing for bankruptcy?

Once you emerge from the bankruptcy process, it will likely take some time before creditors will approve you for a line of credit (i.e. credit cards). This is because the bankruptcy will show up on your credit report and serve as a red flag to lenders.

However, as you work on building it back up again, your credit card options should then increase. In the meantime, while you wait for your score to improve so that you can apply for the credit cards of your choice, you may need to settle for secured credit cards or even secured loans.

What are secured credit cards?

Unlike traditional credit cards that offer you a line of credit to spend upfront, secured credit cards require you to pay a deposit. This deposit is the amount you’re able to spend.

For example, let’s say you’re approved for a secured credit card with a deposit of $300. Once you pay the $300, you’ll then be able to spend it the same way you would if you were shopping with a credit card. But, instead of using the creditor’s money, you’re using your own. You’ll also be charged interest for any money that is spent.

Similar to traditional credit cards, secured credit cards also require you to make monthly payments. This will help you build a positive payment history and potentially raise your credit score given you pay on time. Although secured credit cards don’t provide you with money to spend upfront, the creditor will report to the major credit bureaus.

In the event you’re able to keep your balance below 30 percent of your spending limit and make payments on or before your due date, there’s a good chance other creditors will take notice and begin offering your credit cards offering lines of credit and additional perks.

What are secured loans?

Unlike secured credit cards that let you access your deposit, secured loans work differently. A lender will first approve you for a loan amount and then you’ll be required to make monthly payments toward that amount.

For instance, if you’re approved for a $500 secured loan, you’ll be required to make a monthly payment until you reach $500. And once that happens, you’ll then be able to access the full $500 you essentially saved. Not only will this leave you with an extra $500 in your pocket, but if you made all your payments on time, you also helped give your credit score a boost.

Thinking about filing for bankruptcy? Let an AL bankruptcy lawyer determine if it’s the right option for you.

Before you decide to file for bankruptcy, it’s a good idea to gather as much information as you can so that you’re able to make an informed decision. The Moody, AL bankruptcy attorneys at Hill, Gossett, Kemp & Hufford, P.C. can provide you with all the information you’ll need and even determine the types of bankruptcy you qualify to file for.

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

Have questions about this article or a legal concern? Call 800-672-3103.

Hill, Gossett, Kemp & Hufford, P.C. can be reached at:

Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com

Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500

Springville Office