Can you keep a credit card out of a bankruptcy?

Maybe, and only if the balance is $0 when you file your case.

When you file for bankruptcy, the law requires that you provide a list of all of your creditors.

A credit card, however, is not always a creditor.

Why isn’t a credit card always a creditor?

A credit card isn’t always a creditor because the bankruptcy code defines “creditor” as someone who has a claim for money against the debtor.

If there is a balance on the card, then the credit card company has a claim for that balance, and is a creditor
If there is no balance on the card, then the card company doesn’t have a claim, and they are therefore not a creditor

So a card without a balance does not need to be listed in your bankruptcy, and the credit card company might decide to let you keep it open.

Will the credit card company let you keep credit card?

Probably not.

Most credit card agreements have a term, which says that if you file for bankruptcy, then they can close the account.

The credit card company almost always has the right to cancel the account at their sole discretion.

In my experience:

Sometimes they cancel the card automatically when you file bankruptcy, but
Sometimes they don’t

It really depends on the policies of the lender.

How do they learn about the bankruptcy if they aren’t listed as a creditor?

Most large lending companies subscribe to an electronic information service that alerts them to all bankruptcy filings in the country.

They then check to see if they have any accounts with the person who filed the bankruptcy, at which point they may close the account, or leave it open. That decision is up to them.

Can you get a credit card after bankruptcy?

You can, however, always get new credit cards after filing for bankruptcy.

Many of my clients continue to get applications for new credit cards in the time after filing for bankruptcy, and tell me that it isn’t hard to get new credit cards.

At worst, some have had to use a secured card for a few months until their credit score improves.

Remember, filing for bankruptcy can improve your credit score.

WHAT TO DO NEXT

If you’re trying to keep a credit card out of bankruptcy and thinking of filing of Chapter 7 Bankruptcy or Chapter 13 Bankruptcy in Minnesota, then why not not speak to us now at 612.824.4357?

We’ll give you all the help and advice you need.

Alternatively, fill out our free Bankruptcy Evaluation Form to see if filing for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy in Minnesota is right for you.

We’re looking forward to helping you.