And What About Credit Cards and Department Store Cards?

It is almost never a good idea to reaffirm a credit card.  Reaffirming means you will pay bills that your bankruptcy would normally discharge.  That can be a very high price to pay for the convenience of a credit card.  Try paying cash for a while.  Then in a few years, you can probably get a new credit card, that won’t come with a large unpaid balance!

If you do reaffirm, try to get something in return, like a lower balance, no interest on the balance, or a reasonable interest rate on any new credit.  Don’t be stuck paying 18-21 percent or higher!

Some department store credit cards may be secured.  The things you buy with the credit card may be collateral.  The store might tell you that they will repossess what you bought, such as a TV, VCR, or sofa, if you do not reaffirm the debt.  Most of the time, stores will not repossess used merchandise.

However, repossession is possible.  You have to decide how important the item is to you or your family.  If you can replace it cheaply or live without it, then you should not reaffirm.  You can still shop at the store by paying cash, and the store may offer you a new credit card even if you don’t reaffirm.  (Just make sure that your old balance is not added into the new account).

For more information about bankruptcy, please call us at 408-294-6100, or e-mail us via info@sjconsumerlaw.com.  One of our attorneys will be able to answer any questions which you may have in greater detail.  Please remember that the foregoing information is of a general nature, and does not constitute legal advice.  The facts of each situation are unique, and we must discuss those facts with you before any advice can be given.