As much as we all would want to avoid having to file bankruptcy, sometimes for some people there really is no other option, when this occurs these people often start worrying about things like the obtaining of a good credit card after bankruptcy.
However regardless to what some may think obtaining a credit card after bankruptcy isn’t impossible. There are companies willing to provide this although normally you can expect high interest rates and additional annual fees.
Did you know that once you have filed bankruptcy you cannot do so again for an additional seven years? This is why you will find some companies willing to provide you with a credit card.
You see normally credit card debt is considered un-secure, but when the person in debt cannot file bankruptcy the credit card company has the option to use wage attachment to get back the money.
Although these credit cards are available after bankruptcy they can be a risky option for some. Not only will you be dealing with higher interest rates but you will be charged on late payments and this can quickly add up.
It is not uncommon for people to take out these cards in an attempt to better their financial situation, this is despite the fact that it is not unusual for the total annual fees associated with the card to add up to much as the card holders very credit limit.
Things can go from bad to worse
To put things into perspective let us say for example that your credit card after bankruptcy annual fees are $290 and your initial credit limit was $300, if you were only one day late for a payment you can expect on average to end up paying $30 as a late fee.
But it gets worse; all this will push your liability up to $320 which in turn will give you an additional $30 fee because you were over your limit. Now you would have a $350 debt.
To make matters even worse the interest rate on this card could quickly add up on the maximum that is allowed by law since the obligations on the credit card after bankruptcy were not met.
With the exception of actually paying up there really isn’t an easy way out at this stage, especially as many companies will make the demand that they are paid in full within 30 days.
This can include anything from daily phone calls to court proceedings and wage garnishment. Once this happens, getting out of debt from that one credit card after bankruptcy can take years to clear up.
So as you can see although it is possible, it comes with some possible hefty consequences! The bottom line is, it will depend on your situation and your ability to keep in check on your payments as to whether it would be for you or not.
Were you wondering How To Get A Credit Card After Bankruptcy? I hope this was useful!
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