Bankruptcy doesn't have to be something bad.
It can actually be the start of something good.
Your situation is unique, and it's personal.
Your attorney should be as well.

Unintended Consequences of Closing a Credit Card

Every month, you receive a statement from your credit card company that reminds you that far into the future, you will still be making payments for purchases that you may have made long ago or may have long since come to regret. It can be a disheartening experience, and sometimes you may not have the funds on hand to make the minimum payment, leading to the imposition of fees, penalties, and the attachment of a higher interest rate to the account.

In light of all this, it is no wonder that when the balance nears zero it can boost your spirits, and when you have paid a credit card balance in full it can be very tempting to close the account in a symbolic gesture of victory. That could be a financial mistake, however, due to the way that credit scores are calculated.

If you find that you are consistently unable to keep up with the demands of your creditors and other service providers, then it might be appropriate to consider a bankruptcy filing. To discover whether this may be the best choice for your situation, contact the skilled and experienced Birmingham bankruptcy lawyers of Greenway Law, L.L.C. at (205) 324-4000.

How Closing Accounts Can Hurt

Though it may seem somewhat counterintuitive, closing a credit card account can be damaging to your credit for several different reasons, including:

  • The length of account histories is considered in your credit score, so closing an old account can effectively shorten the record upon which credit decisions are based.
  • Maintaining an active account with a low balance and making regular on-time payments can significantly boost your credit score.
  • Closing an account lowers the amount of overall credit available to you and increases the ratio of balance to limit, dragging down your credit score.

To clarify the issue, remember that a key component of your credit score is determining whether you are able to handle credit responsibly. When you close an account, you lose a means of proving such responsibility.

Contact Us

The financial difficulties of the past and present do not have to haunt you in the future. Contact the Birmingham bankruptcy lawyers of Greenway Law, L.L.C. at (205) 324-4000.

"When I had my power cut off because I just didn't have the money to pay the power bill, a friend suggested I call Paula Greenway. From the moment I walked in her office I felt like a burden was lifted from my shoulders."
Robin M
"I would just like to say that I was impressed by the staff of Greenway Bankruptcy Law, LLC and their attention to professionalism. They made the bankruptcy process not only pleasant but simple."
Jennifer S.
I can't tell how comforting it is to know your attorney is working on your case. I would and have recommended their service to friend and associates."Ed H.
"I would like to thank Greenway Bankruptcy Law, LLC for the way in which they handled my bankruptcy case."
Robert M.
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Greenway Bankruptcy Law, LLC
505 20th St N #1220
Birmingham, AL, 35203
Phone: (205) 324-4000
Tuscaloosa: (205) 737-3350
Gadsden: (256) 467-6650

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Greenway Bankruptcy Law, LLC All rights reserved. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. The following language is required pursuant to Rule 7.2, Alabama Rules of Professional Conduct. No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Greenway Bankruptcy Law, LLC 505 20th St N #1220, Birmingham, AL, 35203 | Phone Number: (205) 324-4000