Are you allowed to keep credit cards after filing bankruptcy?

In the old days, some trustees asked bankruptcy debtors to cut up their credit cards right in front of them at the meeting of creditors in the bankruptcy case.

You don’t see much of that anymore. As with so much of our lives, technology has changed the game.

As Jacksonville attorney Chip Parker sets out in this well-written post, credit card companies nowadays sign up for a service that will give them instant notification that one of their cardholders has filed a bankruptcy case anywhere in the U.S.

So if you file a bankruptcy case nowadays, you can pretty much expect that all of the cards will be electronically cut off, though not actually cut up, before sunset on the same day.

Attorney Parker holds out a little hope for those addicted to their cards — the lenders may not perceive a “match” between the data supplied by the Court and their records, especially if the card hasn’t been used much and has a zero balance. But while this might happen, you’ll never know it going in to the case.

So the safest assumption for debtors is to expect all cards to be shut off at filing. Occasionally one may slip though, but instead of congratulating yourself for this luck, ask if the debt road is one you really want to go down again.


By Doug Beaton

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