Can I keep some of my credit cards if I have filed for bankruptcy?

Under bankruptcy law, individuals or entities can file for bankruptcy in order to obtain protection from creditors and wipe out debt. Most of your creditors will close your accounts as a result—especially if you are bankrupting the debt you owed to them. It may be possible, however, to keep a credit card after your case is filed and/or discharged. Whether or not you may do this depends on what the credit card company is willing to do and on whether you have any money to put towards your debt.

When Can You Keep a Card?

If the company that holds your credit card is willing, you can try reaffirming the card in order to keep it. This essentially means that you tell the credit card company that you will pay them back, even during your bankruptcy filing. A reaffirmed debt is not erased by the bankruptcy, and you are generally responsible for payments on time throughout. If you do reaffirm the debt and the creditor agrees, you’ll be able to keep the card. Doing this may not be a wise idea, however, since you will then have to pay back at least some of the debt you owe.

You may approach the creditor with a reaffirmation offer if you choose, or some creditors will send you a reaffirmation agreement to try to get you to repay some of the debt. They may also be willing to let you keep the card with a reduced limit. Other companies, however, do not want to have accounts held by those with bankruptcy on their records and they may close your account as an automatic action, regardless of your personal history with the card or your desire to reaffirm the debt.

Other Options

Your other option, if you have a zero balance on the card and you have had it for at least six months, may be to simply leave the card off of the bankruptcy filing since you don’t owe debt on it. This can be a bad idea, though, since hiding an account that you paid off may cause other creditors to ask why you couldn’t have paid them something. This could also possibly get you in trouble with the court and, of course, even if you don’t list the card, if and when the company learns of your bankruptcy filing, they can simply cancel it on you anyway.

Getting Help

Before reaffirming any debt, you need to consult with a bankruptcy lawyer to learn more about bankruptcy law and to find out if reaffirming debt is in your best interests.

Case Studies: Keeping Credit Cards After Bankruptcy

Case Study 1: Reaffirming a Credit Card Debt

John has filed for bankruptcy and wants to keep one of his credit cards. He approaches the credit card company and offers to reaffirm the debt, assuring them that he will continue making payments during the bankruptcy filing. The credit card company agrees, and John is able to keep the card. However, he needs to be aware that reaffirming the debt means he will be responsible for paying back at least some of the debt.

Case Study 2: Leaving Zero Balance Cards off Bankruptcy Filing

Emily has several credit cards, but she has a zero balance on one of them and has had it for at least six months. She decides to leave that card off her bankruptcy filing since she doesn’t owe any debt on it. However, this may not be a wise decision, as omitting an account that has been paid off could raise questions from other creditors and potentially cause trouble with the court. Additionally, if the credit card company learns about the bankruptcy filing, they may still cancel the card.

Case Study 3: Seeking Legal Advice on Reaffirming Debt

Sarah wants to explore the option of reaffirming her credit card debt after filing for bankruptcy. She consults with a bankruptcy lawyer to understand the implications of reaffirming debt and whether it is in her best interests. The lawyer provides guidance on bankruptcy law and helps Sarah make an informed decision about keeping her credit card.