You can get a credit card while in Chapter 13, but only if the bankruptcy court or your Chapter 13 trustee approves the new debt before you take it on. Federal bankruptcy law treats any credit you open during your repayment plan as a post-petition claim that has to clear the trustee or the judge first. Sign a card agreement without that approval and you risk your case, your discharge, or both.
Why You Need Permission First
Chapter 13 keeps your property in exchange for a court-supervised repayment plan that runs three to five years depending on whether your income is above or below the median for your household size.1Legal Information Institute (LII) / Cornell Law School. Chapter 13 Plan Every dollar of disposable income during that window is already spoken for. A new credit card payment competes with what you owe your existing creditors, so the system requires oversight before you add one.
Under 11 U.S.C. § 1305, a creditor can bring a post-petition claim against you only for property or services necessary to your performance under the plan, such as keeping a work vehicle running or covering an emergency medical bill.2Office of the Law Revision Counsel. 11 USC 1305 – Filing and Allowance of Postpetition Claims The U.S. Courts summarizes the working rule directly: a debtor may not incur new debt without consulting the trustee, because additional debt may compromise the debtor’s ability to complete the plan.3United States Courts. Chapter 13 – Bankruptcy Basics The rule applies to all new debt, not just credit cards. Auto loans, personal loans, and store financing all require the same clearance.
What Happens If You Skip the Approval
Two things can go wrong, and either one is serious.
First, your case. The bankruptcy court can dismiss a Chapter 13 case or convert it to Chapter 7 for “cause,” which includes a material default on a confirmed plan.4GovInfo. 11 USC 1307 – Conversion or Dismissal Taking on unauthorized debt can be that default. If your case is dismissed, the automatic stay terminates and the creditors it was holding back can resume garnishment, repossession, and lawsuits immediately.5Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay
Second, the debt. Even if your case survives, Section 1328(d) says that a discharge does not cover a debt based on a post-petition consumer claim under § 1305(a)(2) if trustee approval was practicable and was not obtained.6Office of the Law Revision Counsel. 11 USC 1328 – Discharge If you could have asked and didn’t, you owe the full balance no matter how the rest of the plan turns out. There is a matching penalty for the lender: under § 1305, if the creditor knew that trustee approval was available and lent anyway, the court must disallow the claim.7GovInfo. 11 USC 1305 – Filing and Allowance of Postpetition Claims
How to Ask: The Motion to Incur Debt
You request permission by filing a Motion to Incur Debt in your bankruptcy court. Templates are on your local court’s website; fields vary by district, but the judge and trustee need enough information to see that the new credit fits inside your plan. Expect to include:
- The specific lender, proposed credit limit, interest rate, and any annual fee. Rates for borrowers in active Chapter 13 tend to run roughly 18% to 29% on unsecured cards, with annual fees commonly between $50 and $100.
- A written explanation of why you need the card. Courts approve credit tied to genuine necessity, such as work travel, bills that only accept card payment, or emergency repairs. Discretionary spending requests are routinely denied.
- Updated income and expense schedules — a current Schedule I and Schedule J — showing the new payment fits your budget without cutting what you pay creditors.8United States Courts. Bankruptcy Forms
Most debtors have their bankruptcy attorney draft and file the motion. Attorney fees for a supplemental filing like this generally run from a few hundred dollars up to around $1,000, depending on complexity and local rates. The motion is not listed on the federal miscellaneous fee schedule for bankruptcy courts, so there is typically no separate filing fee beyond what the attorney charges.9United States Courts. Bankruptcy Court Miscellaneous Fee Schedule
What Happens After You File
Once the motion is filed, you serve the Chapter 13 trustee and any party that has requested notice in your case. A notice period follows, often 14 days and in some districts up to 21, during which the trustee or a creditor can file a written objection.10US Courts. Order – Case No. 5:16-bk-03043 If nobody objects, the judge may grant the motion without a hearing. If someone objects, the judge sets a hearing and both sides argue.
Do not sign a card agreement or activate a new card until you have a signed order from the judge authorizing the debt. Keep the order. If the lender’s terms change between your filing and the order, file an amended motion with the new terms.
A denial is not final. You can refile with a stronger justification, a card with better terms, or additional budget evidence. The practical move after a denial is usually to address whatever the court flagged and try again.
Local Rules Change the Threshold
The Bankruptcy Code requires trustee consultation for all new debt, but individual courts add local rules that shape when you need a full motion. Some districts set a dollar floor. One local rule, for example, requires prior court approval only for new debt of $10,000 or more, with smaller debts needing only trustee consultation rather than a full motion and order.10US Courts. Order – Case No. 5:16-bk-03043 Other districts set no threshold and require a motion for any amount.
Check the local rules for your bankruptcy court and confirm the process with your trustee before you file anything. Informal trustee approval for a small secured card may be enough in one district and not another. Your attorney or the court clerk can tell you which applies.
What Card You Can Actually Get
Court permission is one hurdle. The lender is the other. Most major issuers will not extend an unsecured credit line to someone in active Chapter 13. The realistic option for most debtors is a secured card, where you deposit cash — usually equal to the credit limit — and draw against your own money. Because you are not taking on traditional debt, trustees and courts tend to be more receptive to these requests. Secured cards report to the credit bureaus the same way unsecured cards do, so they double as a rebuilding tool during the plan.
If your goal is simply to pay bills online, book travel, or shop electronically, a debit card tied to your checking account or a prepaid card does that without creating new debt. No court approval is required because no borrowing is involved. You lose the credit-building benefit, but you also carry no risk to your case.
How a New Card Affects the Rest of Your Plan
Adding a monthly card payment changes the disposable income figure that drives what you pay creditors each month. If the new payment reduces what you can contribute, the court may require a plan modification under 11 U.S.C. § 1329.11Office of the Law Revision Counsel. 11 USC 1329 – Modification of Plan After Confirmation A modification can adjust payment amounts or stretch the timeline, but the plan still cannot exceed five years from when your first payment was originally due.
You, the trustee, or any unsecured creditor can seek a modification at any time before payments are complete. That means even after the court approves your card, the trustee can come back and ask for an adjustment if the new debt looks like it is eating into what creditors receive. Keeping the balance low and the payments consistent is the way to avoid that.