4 Things to Know About Keeping Credit Cards with Bankruptcy

Credit cards often lead people into financial trouble, but they also serve important purposes. From unexpected business expenses to emergency situations at home, having a credit card can make life easier. As such, it is little surprise why many people wonder whether they can keep their credit cards when filing for bankruptcy, as a bankruptcy lawyer, like from Chorches Bankruptcy Law, can explain. The short answer is no, but if you are looking for more clarification, here are four things to consider.

1. You Cannot Pick and Choose Which Creditor You Repay

No matter how useful an existing card has been in emergency situations, you cannot choose to repay some debts while ignoring others. The fact is, you have an equal obligation to each creditor. For this reason, the court requires you to disclose all cards and approaches each of them under the same process.

2. Your Card Balance Does Not Matter

Some people think they can exclude credit cards they have kept up on, but that is not the case. Whether you owe $5,000 on one card and $0 on another is irrelevant. The bankruptcy trustee will consider them both debts, and every credit card account you currently have will likely close as a result of your bankruptcy.

3. You Are Not Usually Responsible for Company Cards

If you use a company card that your employer pays for and provides, it is unlikely you will need to consider this card at all in your bankruptcy. The court typically only considers employee credit cards if you are the one who is responsible for paying the balance. In most cases, an employer pays the monthly bill.

4. Bankruptcy Offers a Chance to Start Over

One of the best parts about bankruptcy is the relief you will feel after you are able to hit the reset button on your finances. As you enter into a new chapter of your life, why would you want to drag any old credit cards into the future with you? While it is understandable to worry about your access to credit following a bankruptcy, you will have opportunities for rebuilding your finances in the future. It is not necessary to take existing cards with you.

When people file for bankruptcy, it is not uncommon for them to ask about keeping some credit cards. If you have been hoping to keep one of yours, it is unlikely you will be able to do so. The good news is, there will be future opportunities to rebuild credit after your discharge.