Can I Keep Some Credit Cards If I Declare Bankruptcy?

a pile of credit cards

Bankruptcy has helped individuals rebuild their finances and secure their futures. However, bankruptcy may require debtors to make some sacrifices along the way. One of the most common questions that debtors have about their life after bankruptcy is if they can keep their credit cards. Our Indianapolis bankruptcy attorneys explain if you can below.

Can I Keep Credit Cards After Bankruptcy?

If you use credit cards to stay afloat and build credit, you might be wondering if you can keep them after filing for bankruptcy. In fact, it’s unlikely for debtors to keep their credit cards after they declare bankruptcy. During the bankruptcy process, all creditors are to be treated the same. Therefore, it would be unfair for an individual to discharge $10,000 from a specific creditor and keep the debt on your credit card.

Can I Exclude Credit Cards in My Bankruptcy Filing?

When you file for bankruptcy, you will need to list all the credit cards you have, even those with zero balance. The bankruptcy court will then notify all of your creditors that you filed for bankruptcy, and in some cases, creditors will withhold borrowing privileges immediately for the debtor.

Excluding debt is not an option when filing for Chapter 7 bankruptcy. Bankruptcy laws require debts to list all of their debt on the bankruptcy petition. Even if you don’t owe a balance on a credit card, you are still required to include it in your bankruptcy papers.

When you submit your bankruptcy petition, all contracts will be canceled, including credit cards, leases, and secured car loans. Since all contracts are automatically canceled, credit card companies will need to cancel the cards since they can’t enforce ongoing obligations without a contract in place.

Will I Be Able to Keep My Company Card?

You may be able to keep your company credit card if you are an authorized user. Credit card charges made by an authorized user will be billed to the company directly and aren’t in the authorized user’s name. Therefore, if you are an authorized credit card user, you likely won’t need to include the company card in your bankruptcy, and you should still be allowed to use it.

However, if you are an obligor on the account, you won’t be able to use the company card anymore. If you’re the obligor on the account, you and your employer are jointly responsible for paying the balance. This may include you paying the credit card bills and seeking reimbursement from your employer afterward. However, if there is a balance on the account, you will have to list it on your bankruptcy paperwork, and the credit card company will likely close the account.

Can I Open a New Credit Card Account After Bankruptcy?

Yes, even though you lose your credit cards during bankruptcy, you can still open a new credit card after. If you file for Chapter 7 bankruptcy, you will be free to start rebuilding your credit sooner than you might think. If you’re unsure if obtaining a credit card soon after bankruptcy is a good choice, you should seek guidance from an experienced debt relief attorney.

Indianapolis Bankruptcy Attorneys

If you want to file for bankruptcy and have more questions about life after bankruptcy, contact our team at Jackson & Oglesby Law LLC today. Our team is ready to answer any questions and guide you through the bankruptcy process from start to finish. We can help you analyze which bankruptcy chapter is right for you and which steps you should take to repair your credit after bankruptcy.

Contact our Indianapolis bankruptcy lawyers today at (888) 713-5148 to schedule a consultation!

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