Can I Keep a Credit Card While Filing for Bankruptcy?

Bankruptcy offers debtors the chance to wipe out many forms of unsecured debt, including credit card debt. But does that mean you’ll have to give up your credit cards entirely during bankruptcy?

It depends. While it is often possible to maintain a credit card to use during bankruptcy, you may decide that you don’t want to – especially if overspending contributed to your financial problems.

When you file for bankruptcy, you’ll need to list each and every debt that you owe, including those credit cards. The good news is that most of the debts you include can be discharged completely through Chapter 7 bankruptcy.

For most people, the convenience of eliminating a large credit card balance far outweighs the benefits of holding on to the card. Keep in mind that Chapter 7 bankruptcy is a fast-moving process, often wiping out debts in just a few months.

If it’s very important to you that you keep a card – maybe you want a form of payment to use for emergencies, for instance – it is often possible to do so by reaffirming your credit card balance and entering a new agreement with your credit card company.

Also, if you have a credit card with a zero balance at the time of your bankruptcy filing, you aren’t required to include it with your list of debts. However, keep in mind that the interest rate on any existing credit cards may increase once creditors get wind of your bankruptcy filing.

For most folks, the most practical solution is to simply get a new credit card after bankruptcy. Contrary to popular myth, it is possible to get credit after a bankruptcy filing. Many of our clients receive credit card offers soon after receiving their bankruptcy discharge.

In fact, getting the right kind of credit card after bankruptcy – and showing you can use it responsibly – is an important step in rebuilding credit.

Secured cards, cosigned cards and store or gas cards are often easier to acquire than traditional credit cards, and are less likely to lead to new debt trouble. After you’ve demonstrated you can make timely payments on your new card, you should be able to apply for and receive a regular credit card. (Of course, after obtaining debt relief from unmanageable credit card debt, many people find they’re better off without traditional credit cards after bankruptcy.)

Credit cards are supposed to be convenient, allowing us to buy time between purchasing an item and actually paying for it. But when credit card debt spirals out of control, credit becomes less of a convenience and more of a curse.

Don’t let fear of giving up credit cards during bankruptcy keep you from finding lasting financial freedom. With the right bankruptcy plan, it’s possible to eliminate debt and rebuild your finances so that you can once again get credit – if you want to, that is.

To learn more about the power of bankruptcy – and find out whether bankruptcy is right for you – contact DebtStoppers to schedule a free personal debt analysis with one of our experienced bankruptcy attorneys today.


Can I Use My Credit Card After Bankrutpcy? By Eric Sandberg, Fox Business

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