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Can you continue to use a credit card in bankruptcy?

Bankruptcy generally has different connotations whether the filing party is an individual or business. When individuals file for bankruptcy, it generally means they have fallen too far into debt and need help getting out.

Most people would probably not say they are okay in the midst of bankruptcy proceedings. Bankruptcy may be the only way to get personal finances in order, and it may be challenging to get through it on the other side all right. However, people filing bankruptcy will have some restrictions for the time being, and that includes not being able to use a credit card. 

No new debts

When people are in the middle of bankruptcy, the court prevents them from adding new debts. That means not making purchases with a credit card because there is a chance they will not be able to pay it off in full every month. Many credit card companies know about these laws, so they will not give credit cards to people in active bankruptcy. Besides, the point of bankruptcy is to get finances in order, which may be difficult to achieve if a person continues to accumulate more debt after discharging old ones.

Alternatives to credit cards

Before filing for bankruptcy, people should look at their financial situation and come up with a budget that will allow them to live within their means. This includes determining how much is necessary for living expenses, food and the other essentials prior to filing. Not only is this helpful for a person to regroup and get back on his or her feet, but the court will also want to see this budgeting plan.

Although using a credit card is off the table, people can continue to enjoy the convenience of debit cards. They may also want to look into other credit services, such as PayPal Credit, which is a trusted partner for all mobile payments. 

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