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Better Understand the Law

Keeping My Credit Cards through Bankruptcy

When considering bankruptcy, we each seek to clean up our past as well as plan for our future. Because credit card use is so engrained in our way of life the United States, wondering whether you can keep your credit card through bankruptcy is a common concern.

  • After all, we use credit cards not only out of habit, but as a “necessity” to purchase tickets, book hotel rooms, make online purchases, rent a DVD at Redbox, rent cars, and pay for emergencies.
  • And, even for those who are going through bankruptcy and have decided to forgo credit cards because of their many perils, having one locked away “just in case” does provide a sense of security.

Usually You CANNOT Keep a Credit Card Through Bankruptcy

You’ll get the opportunity (and have the need) to start fresh after your bankruptcy discharge.

  • All creditors, including credit card companies, with any balance due will be notified immediately when the court accepts your bankruptcy petition.
  • Usually, the creditor will close your credit card account.
  • Even if a creditor is not listed on your bankruptcy petition (because you have a zero balance), most credit card companies review customer creditor reports on a regular basis. When the bankruptcy is noted, your account will likely be closed.

    WARNING: The court and bankruptcy trustees investigate if one creditor has been favored over another so be sure to consult with a qualified bankruptcy trustee before paying off a creditor so you have a chance at keeping that card.

Occasionally You Can Keep a Credit Card Through Bankruptcy

Once in a blue moon, you can keep a credit card at the discretion of that particular creditor.

However, most bankruptcy attorneys advise that you’ll likely have more luck by focusing on building new credit.

Is Having a Credit Card a Good Idea?

Although most bankruptcies are caused by medical bills, job loss, and the housing crisis, many are caused by overspending and credit card company shenanigans.

  • It’s soooooo easy to overspend and get in financial trouble when predatory credit card companies continuously raise credit limits; then, suddenly skyrocket interest rates and tack on ridiculous fees.
  • We’ve observedinterest rates go from something like 8.9% up to 32.99% overnight because of a supposedly late payment.
  • More and more credit card companies are being heavily fined for cheating customers by claiming payments were late when they weren’t or claiming payments were never received when they were.

    Credit card company employees have come forth and disclosed that they shredded checks or held checks so they’d be late.

Bottom Line: Credit card companies cannot be trusted. If you choose to have a credit card after bankruptcy, be sure you can pay off anything you charge within that first month and either pay online or mail your check extra early to avoid the credit card company falsely claiming you were late.

How to Rebuild Your Credit and Get a New Credit Card

Your bankruptcy will stay on your credit report for 10 years. That’s a really long time; however, it doesn’t mean that you won’t be eligible for a credit card all that time. You do have options. It’s likely a good idea to start with a secured credit card or a debit card and, then, transition into the regular credit card.

  • Secured credit cards are similar to debit cards, but they debit cash from your secured card account, not a bank account. When making a purchase, they work like a credit card from the retailer’s perspective and like a debit card from the consumer’s perspective.

  • Debit cards are used like a credit card but debit cash from your bank account instead of charging up what you owe. Some folks hesitate to use debit cards online because if there is a fraudulent transaction, all the money in your bank account may disappear. If this is a concern, consider using the secured credit card described immediately above.

  • Regular credit cards as time goes by and you pay all your bills on time, you’ll rebuild your credit and will be eligible for a regular credit card, with increasing credit limits over time. However, always be aware that credit card companies are not honest. Make sure you’re aware of all their “rules” and that you make payments way in advance and in full each month.

In Summary

Because credit cards are a common way of dealing with purchases and financial responsibilities in American society, many folks like to have a credit card through bankruptcy and after the bankruptcy discharge.

It’s unlikely that you will be able to keep the same credit card throughout your bankruptcy; however, on occasion some creditors don’t notice or choose to ignore the filing.

You absolutely will be able to rebuild your credit and have a credit card after your discharge. Many folks start with a secured credit card, use a debit card, and work their way into using a regular credit card again. Always use caution when dealing with any credit card company.

If you need to deal with a credit card company or want to know how bankruptcy laws personally affect your individual situation, it’s always a good idea to consult with a bankruptcy lawyer. To find a bankruptcy attorney, please feel free to use our free and private site, When you do so, you’ll be entitled to a free no commitment no obligation bankruptcy case evaluation.

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