does filing bankruptcy or having your house foreclosed on affect your current credit cards that u have?

If I file bankruptcy or let my home be foreclosed will that affect my current credit card interest rates? Im in great standing with my credit cards. After the foreclosure happens can the credit card companies raise my interest rates or will they even find out about it if they dont run my credit again. Can they run my credit without my approval?

By | 2013-08-27T05:19:13+00:00 August 27th, 2013|Mortgages Home Loans Interest Rate|10 Comments

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10 Comments

  1. MSAD August 27, 2013 at 10:36 AM - Reply

    Yes.

    Your credit card interest rates will be raised.

  2. Studly August 27, 2013 at 10:19 AM - Reply

    In the fine print of your credit card application, you will notice that those dirty buggers included a clause that if your credit score should drop, they can increase your interest rates. See http://levin.senate.gov/newsroom/release.cfm?id=288160 for info on this.

    (Maybe if enough people complained to Mr. Levin and the rest of the banking subcommittee, they will get off their buts and pass this bill!)

    Therefore, a foreclosure COULD trigger a rate increase on your rates.

    With a bankruptcy, when you file that info is public information. The credit card companies will regularly check those records for new filings, and inform the bank about it. It’s then up to your bank if they wish to cancel your card or not (they usually will).

    If you plan to file, here is some advice I give to people. Pick one of the cards and pay it off at least 30 days prior to filing. Since you don’t owe on it, the card will not be included in your bankruptcy. Yes, you must still declare it. But if you owe them anything and you stiff them on it, there is simply now way the will do business with you.

    Be sure to contact the bank and inform them of your intentions, and request that they keep you on. They will most likely drop your limit to $500 and hit you with a higher interest rate, but you will at least have a credit card to help you re-establish your credit score.

    I’ve helped several people with their BK’s and this does work. But remember that the bank is under no obligation to let you keep the card, and if you have a history of delinquencies with them you can bet they will cancel it, zero balance or not.

  3. Dont_taze_me_bro August 27, 2013 at 9:49 AM - Reply

    There is a universal defult provision.

  4. Vadalia August 27, 2013 at 8:59 AM - Reply

    Some credit card companies run your credit every month (Capital One does) A lot of companies also have a clause that if your credit score drops below a certain point, you automatically start paying the highest interest rate (the “default” rate)

  5. SPIFIMAN1 August 27, 2013 at 8:14 AM - Reply

    It depends.

    Most all terms and conditions give the credit card companies the right to check your credit every now and then to see if you still meet their guidelines, how your paying other people and to see if they want to increase or lower your credit limit based on what they see.

    They also have the universal default clasue that says if your paying people late they have the right to raise your interest to whatever the maximum allowed is.

    Now depending on what they see and whats in their terms and conditions it is possible that they can cancel your credit cards

  6. bdancer222 August 27, 2013 at 7:34 AM - Reply

    You already gave them permission to run your credit when you initially applied.

    Changes in your credit score can cause credit cards to increase interest rates. If you file bankruptcy, you have to list all your debts. There’s a good chance all your credit card accounts could be immediately closed.

  7. Ang August 27, 2013 at 6:51 AM - Reply

    After a foreclosure your credit cards will not be affected. However if you plan to file bankruptcy, all of your credit cards will be closed.

  8. BlessedSAHM August 27, 2013 at 6:40 AM - Reply

    They would only find out about it and possible raise your rates only if they run your credit.

  9. silkbutterfly1973 August 27, 2013 at 6:24 AM - Reply

    Of course they can raise yoru rates with a bankruptcy or home forclosure . yes they do run your credit periodically and do adjust your rate accordingly .
    you should already know this its in the fine print of all credit cards …and yes you may be then looking at interest rates as high as 30-35%

  10. Harry O August 27, 2013 at 5:31 AM - Reply

    Credit card companies can and will raise rates for any or no reason. Declaring bankruptcy is a reason that your rate will rise to the legal high limit.

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