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I have several CC acounts with zero balances that are in good standing. Would I want to close these before I file bk7? I have read a few mixed reviews.
Thank you.
@Laxbam7 wrote:I have several CC acounts with zero balances that are in good standing. Would I want to close these before I file bk7? I have read a few mixed reviews.
Thank you.
Yes. This way you preserve the good payment history and the account will read "closed by consumer". You will not get "included in bankruptcy (iib)" notation on the account. You may even be able to go back to those lenders after your BK is discharged to obtain another account depending upon the creditor. The account can/will stay on your report for 10 years past closing.
If you leave them open then the account is marked iib which is a negative and removed entirely at 7 years. The likelihood of the account surviving the BK even with a zero balance and being open is extremely slim as creditors subscribe to a BK service from the CRA's. The minute you file and your SS matches one of their accounts, the TL is shut down. There are exceptions, but they are rare and when discovered at a later date, the account is shut down.
So for a better rebuild and a better, longer lasting positive tradeline, close those zero accounts before you file.