Understanding Bankruptcy, Mar. 26, 2020

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Question: Can I keep any of my credit cards once I have filed for bankruptcy?

Answer: Ultimately it will be up to the credit-card company if you can keep your credit card after filing for bankruptcy.

If you have a balance on the card that you are trying to eliminate with bankruptcy, the company will cancel your card. They will know of your bankruptcy filing because you will have to disclose all of your debts on your bankruptcy filing, meaning you will have to list them as a creditor.

If you have a card that does not have a balance, then technically it is not a debt and does not need to be listed on your filing. However, bankruptcy is public record and is reported to credit reporting agencies. Therefore the company will probably find out and is able to terminate your account even if you have no balance prior to filing for bankruptcy.

You may also be able to keep a credit card by reaffirming it after your bankruptcy case is filed. When you reaffirm, you are signing a new contract with the credit-card company that makes you personally liable on the debt again, meaning you lose the benefit of the bankruptcy discharge for that debt.

Since bankruptcies are commonly filed to wipe out credit-card debt, it is normally not a good idea to reaffirm a credit card.

Next week’s question: How much debt do I have to have before filing for bankruptcy?

Michael A. Cibik, Esquire

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