Can I keep a credit card when I file for bankruptcy?

It is the eternal question at any bankruptcy attorney’s office: “If I file a bankruptcy case, can I keep one of my credit cards?”

Unfortunately, the short answer is probably no.

We live in an age of increasing communication speeds. Most major credit card companies are wired into both the credit reporting agencies and the bankruptcy court computer system. When you file a bankruptcy case, they will receive alerts almost immediately. And then they will typically cut off your existing credit lines.

So it is counter-productive to try and “save” one of your credit cards during the bankruptcy process. Any balance on any card should be declared so that you get the maximum benefit of the discharge that the court will be granting you.

Above and beyond that, the Bankruptcy Code requires that you list all your debts and creditors on the forms when you file, and that you not try to favor one creditor over another. When you are seeking important relief from a court system, it is important to play along with their rules. ‘Nuff said.

Please note that “keeping” a card outside of the case is a different question from “Will I be able to get a credit card after I file?” Many Chapter 7 debtors see their credit ratings improve after bankruptcy, and some even report that they can obtain more credit after the filing than they could before.


By Doug Beaton

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