Hello, this is Roger Ghai, and I practice bankruptcy law in the Kennesaw, Marietta, and Acworth areas. Sometimes we do accept cases from Atlanta. I wanted to talk today a little bit about whether you can keep your credit cards if you have a zero balance if you file a bankruptcy case. Let me begin by saying the answer is no, because even if you have a zero balance on your credit card, that you have and you’ve filed a bankruptcy case, the credit card companies receive a report of who’s filed a bankruptcy and who’s not. And so, as a matter of procedure, the decision really isn’t yours once you file a bankruptcy case. The credit card company will automatically close down the credit card account. So even, like I said, if you have a zero balance and you’re contemplating filing a bankruptcy case, the credit card company will not give you the option of keeping the credit card. They will just go ahead and automatically close down your credit card, even though it has no balance.
So sometimes people wonder and they ask, “Well, what do I do in that situation? Because I need a credit card company for basic things such as getting gas, or what have you.” Normally, what clients will do is they will, following the bankruptcy case, they will go ahead and put down, for example, $500 or $300 and get a secured credit card. And actually that’s a good thing because once you get out of a Chapter 7 bankruptcy case, you’re then beginning to rebuild your credit. It is secured. And then at some point, let’s say you continue to pay consistently and on a very good repayment basis once you receive the bill from the credit card company every month, they will, at that point, no longer require that you have a secured amount.
So you might’ve started with a three or $500 credit card that was secured, but then they will go ahead and up the limit and you will not have to pay any more security deposit to the credit card companies. I hope you found this information useful with regard to whether you can keep your credit card after you file a bankruptcy and what happens to credit cards during the process of the bankruptcy filing. If you have any questions about bankruptcy, call my office please at (770) 792-1000.
Bankruptcy FAQ:
Frequently Asked Questions: Table of Contents Who is permitted to file and maintain a chapter 7 case? Who should not file a Chapter 7 case? Is there anything that a person must do
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