Can I Keep My Credit Cards in Bankruptcy?

In general the answer is "no". Once you file bankruptcy, credit card companies will know you filed whether you list them or not. Most credit card companies will close your existing accounts, even if you have a zero balance at the time of the bankruptcy filing. While your bankruptcy case is open it will be hard for you to acquire new debt but you should be able to get a secured credit card. A secured credit card is one that is tied to the balance in your checking or savings account.  In some instances, small business owners will be able to keep their business credit cards. We do not recommend that clients keep their credit card accounts current going into the bankruptcy because there is no assurance the credit card company will keep the account open or extend additional credit after the case is filed. So if you are contemplating bankruptcy, now is the time to consult with a Contra Costa County bankruptcy specialist like David A. Arietta. We can strategize your next best options.  We may be able to save you some $$. If bankruptcy is a better option, here are some initial steps:  1) client will need to terminate any debt management or debt consolidation programs and possibly get their money back; 2) client may need help navigating pending collection lawsuits or collection letters; 3) client should not use exempt assets like 401Ks and IRAs to pay credit card accounts;  4) client should not communicate directly with debt collectors as they will do anything to get you to give them some money as payment on the account.  Collectors usually accomplish that with false unqualified statements like "we will garnish your wages" or "we are going to levy your bank account".  They do not tell you that they first have to sue you and get judgment before they can take those actions; merely writing you a demand letter or calling on the phone are not enough. Once your discharge is entered and your bankruptcy is completed, you will again be eligible for credit cards but you may need to let some time pass to obtain better terms (better interest rates). The credit card offers that you get post-discharge will require you to pay off the balances on monthly basis to avoid very high interest rates. We do recommend getting some credit post-discharge and keeping the payments current so you can start rebuilding your credit. Do not worry because before long you will be getting better credit offers again, most likely from the same companies you listed on your schedules. Contact David A. Arietta at (925) 472-8000 if you have questions. For more questions about bankruptcy, visit our FAQ page.