Comments on: Can You Keep Your Credit Cards When You Declare Bankruptcy?

By: Amber

Amber — Sat, 08 Nov 2008 14:15:31 +0000

No.

What is significant to whether debt can be listed or not is what type of debt it is: secured, unsecured, purchase money secured interest, student loans, payday loan, overdue taxes, criminal fines, mortgage, etc., but NOT what company issued the credit: there is no difference between Amex, Visa, Discover or any other credit card company.

There MIGHT be a problem with the Amex depending on 1) what it was used for, 2) how recently, and 3) if you are trying to protect co-debtors who are not filing with you, but there is no blanket non-dischargablity rule like there is with the student loans.

By: Jean Bellego

Jean Bellego — Sat, 25 Oct 2008 17:04:41 +0000

Hi,

I thank you in advance for your kind advice. I am seriously considering declaring bankrupcy. A friend recently told me that American Express Card debt cannot be listed when declaring bankrupcy just as federal school loans. Is that correct?
Thank you and have a nice weekend.

Jean Bellego

By: Jenna

Jenna — Wed, 06 Aug 2008 22:53:23 +0000

Thanks for your comment Grant!

By: Grant

Grant — Wed, 06 Aug 2008 15:51:30 +0000

Even if you are able to avoid not having your card closed through the court, your FICO score will drop significantly when the bureau receives communication of your bankruptcy. Also, all card issuers receive the list of individuals filing bankruptcy each week. The likelihood of receiving an adverse action (card closed, balance chased to zero, or large credit line decrease) is very high especially in the current environment. If you are somehow able to keep one of your existing cards in working order just count yourself lucky, but otherwise be prepared to try to reestablish your credit through one of the means discussed on this website (secured credit card).

By: Jenna

Jenna — Wed, 06 Aug 2008 02:13:28 +0000

Thanks for your input Michael! It’s valuable to us.

By: Michael

Michael — Tue, 05 Aug 2008 21:02:51 +0000

In regards to the article about keeping a credit card if you file bankruptcy, it all depends if you file a chapter 7 or chapter 13. If you file a chapter 7 your advice may be possible, but if you file a chapter 13, it won’t be possible to keep any of your cards even if they have a zero balance.

The reason I know this as a fact is that I had filed a chapter 13 and had 3 cards with zero balances on them and after I filed, the accounts were closed by the credit grantor. The bankruptcy attorney pulls your credit report information and all your creditors whether owed or paid off is included in your filing petition.

You also have to go through a mandatory credit counseling class that you can do online and it pulls all your creditors up when you take the class. Thus, you will lose your zero balance cards anyway.

Michael