One of the most common questions people ask before filing for bankruptcy is whether they’ll be able to keep any of their credit cards. The short answer is: usually no, but the full explanation depends on several factors, including the type of bankruptcy you file and the policies of the credit card issuer.
Understanding what happens to credit cards during and after bankruptcy can help set realistic expectations—and ease some anxiety about rebuilding credit.
What Happens to Credit Cards in Bankruptcy?
In most cases, you will not be able to keep your current credit cards after filing for bankruptcy, especially if there is a balance on the account at the time of filing.
Bankruptcy law requires you to disclose all debts, and credit cards with balances are considered unsecured debts. These debts are:
- Typically discharged in Chapter 7 bankruptcy, or
- Repaid in part through a Chapter 13 repayment plan
Once a credit card company is notified of your bankruptcy filing, it will usually close the account, regardless of your payment history or whether you were current on payments.
What If a Credit Card Has a Zero Balance?
Even if a credit card has a zero balance at the time you file, there is still a strong chance the issuer will close the account.
Although a zero-balance card may not technically be a “debt,” credit card companies often learn about bankruptcy filings through:
- Public court records
- Credit reporting agencies
Once notified, many issuers choose to close the account as a matter of policy—even if you never missed a payment.
Can I Leave a Credit Card Off My Bankruptcy Filing?
No. You are legally required to list all debts and accounts in your bankruptcy paperwork.
Some people ask whether they can leave one card off the filing in hopes of keeping it. This is not allowed and can cause serious problems with your case. Bankruptcy requires full and honest disclosure, even if you hope to preserve a particular account.
Rebuilding Credit After Bankruptcy
The good news is that filing for bankruptcy does not mean you’ll be locked out of credit forever. In fact, many people are surprised by how quickly they can begin rebuilding.
Within a few months of discharge, many individuals qualify for secured credit cards. These cards:
- Require a cash deposit as collateral
- Function like traditional credit cards
- Report to credit bureaus
When used responsibly—keeping balances low and paying on time—secured cards can help rebuild credit and pave the way to unsecured credit cards over time.
A Fresh Start, Not a Financial Dead End
While bankruptcy usually means letting go of existing credit cards, it also offers something far more valuable: a fresh financial start. With time, discipline, and smart credit use, many people successfully rebuild their credit and regain access to credit cards and other financial tools.
If you have any questions about the topic discussed in this article, or any bankruptcy matter, please give us a call at Bononi & Company in Greensburg, PA 724-832-2499.