Can I keep my business credit card?
October 13th, 2014 by Questions
I owe $35,000 in unsecured debt, I had started a business in the entertainment Industry, I front loaded the business in the amount of $100,000 and also had to pay a $55,000 Levy, my wife and I have been making minimum payments and have not missed a monthly payment but have been late 3- times. My question is, if I apply for the Credit counselling option, is there a way of keeping one credit card to use for my business as I need one to reserve hotels, rental car, etc. We have tried to refinance our home but we do not have enough total income to service the debt. The bank does not consider my business established as I have been running it for just under 2- years. Help, please.
Posted from: British Columbia
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October 13, 2014 at 9:32 am, Doug Stuive, CA | Trustee | CIRP said:
If you file a consumer proposal or enter into a debt management program through credit counselling you are allowed to apply for a credit card after you file that you may use for your business. Often you would need to obtain a secured credit card as credit card issuers would be reluctant to issue a new card to someone going through a proposal. This means you would have to put down a small deposit that is kept in reserve should you default on your credit card payments. All creditors, at the date of the proposal must be treated equally, so you are not allowed to keep one of your existing credit cards and continue to make payments on it just so you can keep it for business use.
There are other factors that would determine whether this option is available to you including the amount of equity in your home and the value of your business. A consultation with a Trustee is your best option for determining if this will help you alleviate your debt issues.