Can I Keep My Credit Cards After I File Bankruptcy?

By: Court Tuttle

Having to file for bankruptcy is a scary thing sometimes. It may feel like the end of the world, and you have finally come to your last resort. Perhaps you feel that you could never again have a loan, never again regain the once amazing credit score that you had before everything went down hill, and never be able to buy anything with a credit card again.

These feelings of hopelessness are burdensome, but some weight can be lifted from your shoulders. There are possibilities of having credit cards in the future, therefore being able to build up your credit score, slowly, until it is once again in the high numbers and a secured spot on the chart.

But how is it possible to keep your credit cards once you have filed for bankruptcy? Don't you have to list them under your debts?

Yes, you do have to list the existing balance on your credit card as a debt when you file for bankruptcy, therefore making that credit card discontinued for further use. Filing bankruptcy gets rid of all your debt, and the balance that exists on your current credit card is categorized as such, therefore giving you no choice.

However, if you have a credit card that does not have a current balance on it, you are allowed to keep that credit card because you are not indebted to that specific credit card company. You do not have to tell that specific credit card company that you have filed for bankruptcy, but they may find out some other way, like by looking at your credit report.

In that case, they may change a few things in the agreement they have with you because of your increased risk of making late payments or making no payments at all. Many credit card companies will keep your line of credit open because they want your business, but they do have the right to change things like your credit limits and interest rates because of something like bankruptcy.

Despite the fact that there is no balance on that credit card, there may be some companies that will discontinue the line of credit they allowed you anyway. Bankruptcy is a red flag to them, and because you are at higher risk, they may invalidate your credit card. However, most companies will not because they still want you to keep an open line of credit with their company.

It is not difficult to get new credit cards after you file for bankruptcy. The fact that you could not pay off your debt may determine a higher interest rate and a lower credit limit, but you still can get a credit card. But if you think about it, the whole point of filing for bankruptcy was to get out of debt and stay out, wasn't it? Still, it is through more loans and credit cards that you rebuild your credit score after bankruptcy.

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