The decision to go through the bankruptcy process can affect a consumer for many years. In fact, many bankruptcy lawyers advise their clients to expect to have difficulty obtaining credit for up to seven years after filing. But soon after filing, many consumers discover that despite their low credit score, they are being solicited for credit cards.
There are several reasons why this happens. To start, credit card companies know that people who choose to file for bankruptcy have struggled with bills for a long time. By providing a credit card to them immediately after filing, the credit card companies are hoping that the customer will make a mistake and rack up debt quickly again.
Credit Cards (Photo credit: 401K 2012)
Another cause is that after filing for bankruptcy, a consumer’s credit report is wiped clean. This can sometimes result in the consumer’s credit score going up. A higher credit score can make some consumers eligible to qualify for a credit card when they otherwise wouldn’t have.
A credit card, the biggest beneficiary of the Marquette Bank decision (Photo credit: Wikipedia)
The main reason that consumers get offered credit cards so soon after a bankruptcy, however, is that the credit card companies realize that the consumer cannot refile for another seven years. This means that the credit card company has seven years during which they can collect from the consumer.
Published in: Personal Finance