Keep Credit Card After Chapter 7

If you have a balance on a credit card at the time you file, you must list that debt on your petition. The bankruptcy laws require that you list all your debts even the debts you want to keep.  If you wish to keep a certain credit card, you will need to seek permission from the credit card provider. Most credit card providers will not allow this. There is a misconception that you may reaffirm a credit card debt. It is unheard of, although theoretically possible, to reaffirm credit card debt. Reaffirmation agreements are generally intended for secured debts like home and auto loans.

If you do not have a balance on your credit card, you do not have to list it. However, your creditor will learn about the bankruptcy through alternate channels (all banks subscribe to a service which notifies them of any clients who have filed bankruptcy). When the bank is notified of the bankruptcy filing, they will cancel your card. Additionally, if you paid down the balance on your credit card within six months prior to filing bankruptcy, the bankruptcy trustee could set-aside the payments as a preferential transfer. Capital One Bank is the only creditor I am aware of that may allow a debtor to retain a credit card after filing. However, you must pay-off the balance of the credit card prior to filing. There may be other credit card providers who allow this, check with you creditor before assuming you’ll be able to keep the card after filing.

Although you are unlikely to retain credit cards after filing, you can start rebuilding credit within 90 days of filing. I offer all clients a free credit repair assessment once they receive a discharge. You may be eligible for a low balance credit card shortly after your discharge. I also suggest using secured credit cards to rebuild credit.