CAN I KEEP MY CREDIT CARDS IF I FILE BANKRUPTCY?

One of the most common questions I hear as a bankruptcy attorney is: “Can I keep my credit cards if I file bankruptcy?”

The short answer is: It’s possible in rare cases, but in most situations, no—your credit card accounts will likely be closed by the issuers once they learn of your bankruptcy filing. This holds true whether you’re filing Chapter 7 or Chapter 13 bankruptcy, though the details differ slightly between the two.

Bankruptcy provides powerful relief from overwhelming debt, including credit card debt, but it comes with trade-offs. Understanding what happens to your credit cards can help you make an informed decision about filing.

What Happens to Credit Cards in Bankruptcy?

Credit cards are unsecured debt, meaning they’re not tied to collateral like a house or car. In bankruptcy:

• Credit card balances are typically discharged (wiped out), so you’re no longer legally obligated to repay them. This constitutes one of the biggest advantages to filing bankruptcy.
• However, the credit card agreement is a contract. Once bankruptcy is filed, issuers often cancel accounts even if the balance is zero.

You must list all credit card accounts on your bankruptcy petition—hiding one isn’t allowed and can lead to serious issues.

Chapter 7 Bankruptcy and Credit Cards

Chapter 7 (liquidation bankruptcy) is the most common for individuals seeking quick relief from credit card debt. It usually discharges eligible unsecured debts in 3–6 months.

• If your card has a balance, the debt is discharged, but the issuer will almost certainly close the account.
• Even with a zero balance, most issuers cancel the card upon noticing the bankruptcy on your credit report.
• Reaffirming the debt (agreeing to repay it post-bankruptcy) is possible but rare and usually not recommended for unsecured debts like credit cards—it keeps the obligation alive.

In practice, very few people retain active credit cards after a Chapter 7 discharge.

Chapter 13 Bankruptcy and Credit Cards

Chapter 13 (reorganization bankruptcy) involves a 3–5 year repayment plan, often used to catch up on secured debts or protect assets.

• Credit card debt is treated as unsecured and included in your repayment plan—you typically pay a portion based on what you can afford.
• Remaining eligible debt may be discharged at the end of the plan.
• During the case, you generally cannot use existing credit cards without court approval (new charges could violate the plan).
• Issuers may still close accounts, though some might allow retention if payments stay current and the creditor agrees.

Chapter 13 offers more flexibility in some cases, but keeping open credit lines remains uncommon.

Rare Scenarios Where You Might Keep a Credit Card

While unusual, some exceptions exist:

• Zero-balance cards: If the account has no debt at filing and the issuer doesn’t cancel it (some smaller or store cards occasionally allow this).
• Creditor agreement: In limited cases, especially Chapter 13, a creditor might consent to keeping the account open.
• Secured or specific cards: Corporate cards or certain secured accounts sometimes survive, but personal consumer cards rarely do.

Success depends on the issuer’s policies—major banks often close accounts automatically.

Rebuilding Credit After Bankruptcy

Losing credit cards is difficult as credit cards can be both a benefit and a curse. But bankruptcy doesn’t mean permanent exclusion from credit. Many people rebuild successfully:

• Start with secured credit cards (deposit equals limit).
• Become an authorized user on a trusted family member’s card.
• Use credit-builder loans or responsible utility payments.
• Monitor your credit report and dispute errors.

Bankruptcy stays on your credit report for 10 years (Chapter 7) or 7 years (Chapter 13), but its impact rapidly diminishes with good payment habits.

Is Bankruptcy Right for You?

If credit card debt is overwhelming you—high interest, minimum payments you can’t afford, collections, or garnishments—bankruptcy can provide a fresh start. The loss of credit cards is temporary compared to the relief from debt.

Every situation is unique. Factors like your income, assets, total debt, and jurisdiction matter.

If you’re considering bankruptcy and wondering about your credit cards (or other debts), contact an experienced bankruptcy attorney for a free consultation. Call LONG & LONG P.C. NOW at 303-832-2655 or use the chat to request an appointment. We can review your specific circumstances, explain your options under Chapter 7 or Chapter 13, and help you decide the best path forward.

This blog post is for general informational purposes only and is not legal advice. Bankruptcy laws can vary by case and change over time. Always consult a qualified bankruptcy attorney for guidance tailored to your situation.