Lake Bluff bankruptcy lawyer offers some advice for those who have filed for bankruptcy protection. Being forced to pay for cash for six months to a year after a bankruptcy filing is a great way to embed inside their way of thinking what things actually cost and how difficult it is to pay for things. Credit cards are a nice convenience however it doesn’t lead to good educational decisions or good educational choices.
By going on a cash basis, I also recommend that you write down for the next month or two months after filing Chapter 7 bankruptcy exactly how much you are spending and on what. That way you can look at your budget and see how it relates to what we filed under your bankruptcy. I don’t want to see a former client continue to spend excessively on food, clothing, entertainment, gas and other items when those items can be drastically reduced. Former clients have found that by reducing their spending going forward not only are they less likely to be in a bankrupt situation in the future but they actually have the ability to build up a savings account. They actually have the ability to put something towards their retirement account. They actually have the ability to save for college, vehicles, houses, things of that nature.
Credit cards are readily available after an individual bankruptcy case however they usually come with high interest, high annual fees and application fees. Merchants know that you as a former bankruptcy filer have a desire to have credit as soon as possible. For that reason, those merchants are going to entice you with credit card offers. Some of these credit card offers contain application fees and by that I mean you have to pay a certain amount down before they will even decide whether or not they’re going to give you any credit. I have had many clients who have wasted money on application fees only to be denied credit. I have had other clients after application fees that were granted credit but the credit was very small, the interest rate on the card was high and there was an annual fee that was associated with that card.
There is no reason to quickly run and get a credit card after you file bankruptcy if you are going to be paying an annual fee, high interest rate and an application fee. You are much better off going to a local bank and filling out an application for a secured credit card. A secured credit card is where you put money on account at a bank, for example $250, and they give you credit charges privileges of $250. Now granted you are spending your own money that you have put up as credit but the benefits are tremendous.