Can I Keep My Credit Card when I File for Bankruptcy?

One of the most frequent questions I get from clients wanting to file for bankruptcy protection is whether they than can keep a credit card out of their bankruptcy.

This question assumes a couple of different possibilities that the client might be facing.

First, they owe a balance on the credit card and they want to keep making the payments on that card, so they can use it in the future.

If the creditor is owed money then this scenario is impossible in a bankruptcy filing because the creditor has to be named in the schedules.  Once the creditor receives notice of the bankruptcy filing they will cancel the card.

The second possible scenario is the credit card has a zero balance just prior to the bankruptcy filing.

In this case the creditor is not listed in the schedules as being owed money, so they don’t receive the official bankruptcy notice that goes to all of the creditors. 

However, creditors regularly monitor credit databases and other public information to determine if their cardholders have filed for bankruptcy.

In my years of bankruptcy practice I have never seen a situation where the creditor did not learn of the bankruptcy filing and cancel the card.

So, in conclusion, the answer is that you cannot keep a credit card if you file for bankruptcy protection.

However, bank debit cards work just the same as a credit card, with the obvious limitation that you have to have the funds available for the charge in your bank account.

As always, any opinions expressed on this website are just that, opinions. So if you have a question regarding bankruptcy or debt relief, then please give me a call to discuss your individual situation.  Bankruptcy, as many other areas of the law are very case or fact specific.  I pride myself on giving you the answers to your questions that are based on your individual circumstances.