"How Often Do Credit Card Companies Sue For Non Payment" Discussion

Upsolve Community Member
Many credit unions utilize cross-collateralization language which result in loans you thought were unsecured to actually be secured obligations. They thus require a debtor to reaffirm on both loans in order to retain the secured collateral. You might find this blog post helpful. https://www.bondnbotes.com/2016/10/03/credit-union-bankruptcy

Upsolve Community Member
You may also want to consider filing a Chapter 13 bankruptcy which, in some cases, will allow you to simply pay the value of the car rather than the entire balance owed.

Upsolve Community Member
Hi Vanessa, this article from the Upsolve Learning Center: https://upsolve.org/learn/credit-unions-and-bankruptcy/ Perhaps this may be of assistance to you. Good luck! :-)

Upsolve Community Member
Vanessa, it will ultimately depend on the credit union's policies, but it is common to reaffirm both types of loans. The article Mark suggested will give you more insight on the topic. I did just notice the article https://upsolve.org/learn/car-payment-too-high/ says this "It is common for credit cards through a credit union to be secured by your car when you also have a car loan with the credit union. While credit cards are usually unsecured, this type of cross-collateralization effectively makes a credit card into a secured debt. Due to this cross-collateralization, credit unions often won't reaffirm a car loan unless the credit card is also reaffirmed. If the credit card balance is high enough, it may be best to surrender the car."

Upsolve Community Member
This article describes the information it sounds like you're wanting to know, Dawn- glad you asked https://upsolve.org/learn/stop-using-credit-cards/ 

Upsolve Community Member
Generally speaking, the most important thing is that you can't make charges that you intend to erase in bankruptcy- that could be considered bankruptcy fraud 

Upsolve Community Member
If you’re getting ready to file and recently used your credit card, it's often a good idea to review what the charges are for. Some expenses are reasonable and won't raise a red flag, but others aren't. Hope that article Travis shared helps!

Upsolve Community Member
I got gas and paid insurance but I’ve made the 2 payment that we’re due

Upsolve Community Member
Hope those articles help you, Dawn! 

Upsolve Community Member
Secured means it's connected to property and unsecured means it's not 

Upsolve Community Member
A car is often a secured debt, and a credit card is often an unsecured debt 

Upsolve Community Member
Does this help? https://upsolve.org/learn/what-is-secured-debt-in-bankruptcy/

Upsolve Community Member
You should also read the fine print in the loan documents. Credit Unions will often connect a personal loan to a car loan, so the personal loan and car loan will be secured with the car loan vehicle. Basically, your collateral for one loan can sometimes "cross over" and work as collateral for other loans you took out with the same company. (On the other hand, if you have a car loan with one company and a credit card with another unrelated company the collateral (car) won't cross over.) This article has some info on cross-collateralization: https://upsolve.org/learn/credit-unions-and-bankruptcy/

Upsolve Community Member
Hi Jennifer, That is not a silly question. It is quite common. It depends on which bills you're asking about- this article can help describe what to do about different types of bills you might have: https://upsolve.org/learn/bills-to-pay-after-bankruptcy/ Here is an additional article on credit cards to give you some guidance: https://upsolve.org/learn/should-i-keep-paying-my-credit-cards-if-i-am-going-to-file-bankruptcy/

Upsolve Community Member
Although it sounds like you already decided to file bankruptcy, you might some more information on credit card debt and bankruptcy in the article https://upsolve.org/learn/file-for-bankruptcy-for-credit-card-debt/. It lists some types of credit card debt that might not get discharged. 

Upsolve Community Member
Jennifer, the articles mentioned above are very helpful. While everyone has different circumstances, when I filed, I had kept current on my credit card payments because "late payments"  take a big chunk out of credit scores, and remain on your credit report for 7 LONG YEARS, regardless of filing bankruptcy or not. (more)

Upsolve Community Member
(cont.) Today, after filing Chapter 7 using Upsolve's software, my credit report is squeaky clean except for two weaknesses: 1) Age of credit (because of loss of cards after bankruptcy) and 2) Bankruptcy itself. In many cases, after filing Chapter 7, credit scores will go up dramatically because, for one, 35% of your credit score is based on UTILIZATION and many of us will have maxed out our credit cards prior to filing. So utilization goes from ~100% to 0% when we file! But late payments will remain if we have them.. 

Upsolve Community Member
Upsolve has a "Room" in this community called https://my.upsolve.org/rooms/19 It's also a good place for conversations about Rebuilding Credit. After filing and receiving my Discharge using  Upsolve in 2020, I have researched, studied, and documented my road back so I hope to see you there! FYI I was at 563 when I filed. a year and a half later, I am around 700. Beware of hucksters out there in CREDIT REPAIR because like Upsolve, you can rebuild your credit for free. Good luck! :-)

Upsolve Community Member
Hi Melissa! I am a discharged Upsolver (July 2020) and my credit score immediately went UP. In my research, I've found that scores go up because most often, credit card utilization (how much of your credit line is used) is 30% to 35% of your credit score!!! That's a big weighting factor. So by wiping out the balances on your cards and installment loans, that 35% goes to 0%. 

Upsolve Community Member
As to your second question, which I LOVE, the answer is YES (assuming you are a trustworthy person, anyway!) in as little as two to three years but it all has to do with interest rates and your "behavior" (spending habits, budgeting, rebuilding credit actions, etc.) when you embark on your FRESH START! 

Upsolve Community Member
Melissa, my credit scores were in the 500's. 1.5 years later, I am in the high 680's Fico 8.0 and over 700 VantageScore 3.0 (you'll learn about scores while researching rebuilding credit!) but I have only 1 Late Payment showing on one of my 3 major credit reports. I don't know what your credit report looks like, so it is hard to give you more of an answer. Let me know if I can answer any further questions citing my own credit rebuilding efforts! :-) 

Upsolve Community Member
Melissa, there's a few resources that might be helpful to you too! This one, on rebuilding credit, can give you an idea of strategies you can take to improve your credit score! It's been really helpful for many people in improving their credit after bankruptcy: https://upsolve.org/learn/rebuild-credit-after-chapter-7-bankruptcy/ 

Upsolve Community Member
You might also want to read this, on buying a home someday! https://upsolve.org/learn/buying-house-after-bankruptcy/