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Regular Contributor
Viper786
Posts: 190
Registered: ‎04-15-2011

What happens to existing credit cards after a BK?

I am asking this question on behalf of a friend. He is about to file BK7 within the next week or so and wants to know what happens to current credit cards in good standing that he wants to keep. He has a capital one cash card that he would like to keep and wants to know if that's possible. Also, when he files for BK7 are all cards supposed to have a 0 balance? The lawyer he talked to said that all existing cards you have will be closed by the creditors as soon as BK is discharged. Is that true?

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ihatemyscore
Posts: 283
Registered: ‎02-05-2012

Re: What happens to existing credit cards after a BK?

In my experience after I filed CH 7 BK, The creditors closed all of my accounts themselves. Most creditors will close the cards whether or not they are included. You might want to tell your friend to contact his creditors too ask about their policies. 

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Comet21
Posts: 204
Registered: ‎08-29-2007

Re: What happens to existing credit cards after a BK?

Most if not all of your creditors are going to close the accounts. Macy's, which I had not used in 3 years and had a $0 balance sent a letter that they were closing my account and it showed as IIB. I disputed it and they just deleted the entire account.


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Senior Contributor
StartingOver10
Posts: 3,814
Registered: ‎03-06-2010

Re: What happens to existing credit cards after a BK?


Comet21 wrote:

Most if not all of your creditors are going to close the accounts. Macy's, which I had not used in 3 years and had a $0 balance sent a letter that they were closing my account and it showed as IIB. I disputed it and they just deleted the entire account.


+1

I had several zero balance cards, they all were closed automatically. Most of the large cc co's subscribe to a BK notification service, so even if you leave their card off the petition because you don't owe them any money, they still receive notification of your BK. I have heard of a few cards slipping through, but I did not experience it...lol.

 

I also had to sign an affidavit with my BK attorney that I had cut up all my credit cards when I filed.

New Member
lca1987
Posts: 1
Registered: ‎05-22-2012

Re: What happens to existing credit cards after a BK?

Most of our existing cards were closed automatically by the creditor before bankruptcy... even though we didn't have a balance.  The only one that miraculously made it through bankruptcy without being closed was Macy's... not sure how, but I'm very happy as that is my oldest card.   It did not have a balance at the time and we didn't include it in our bankruptcy.

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ScoreBooster
Posts: 457
Registered: ‎05-30-2008

Re: What happens to existing credit cards after a BK?

My old Plains VISA (now Mid-America) and my New Millennium secured card were both paid to $0-Balance prior to filing, weren't IIB and are still open. I use them every month and even used them between filing and discharge.

Regular Contributor
Comet21
Posts: 204
Registered: ‎08-29-2007

Re: What happens to existing credit cards after a BK?

That seems to be a very BK friendly creditor. Be thankful for that because not all are like that. We are disputing Macy's as IIB when they had a $0 balance and had not been used in years. We don't want the credit, we just want the derogatory off of our report. Not sure how much of a boost it would have but when you have a BK you need all the help you can get.

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jetsfan2012
Posts: 208
Registered: ‎05-28-2012

Re: What happens to existing credit cards after a BK?

I had 3 CC prior to my filing last summer, 2 of which had zero balance, and they all were closed as IIB.

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Frequent Contributor
ScoreBooster
Posts: 457
Registered: ‎05-30-2008

Re: What happens to existing credit cards after a BK?


Comet21 wrote:
That seems to be a very BK friendly creditor. Be thankful for that because not all are like that. We are disputing Macy's as IIB when they had a $0 balance and had not been used in years. We don't want the credit, we just want the derogatory off of our report. Not sure how much of a boost it would have but when you have a BK you need all the help you can get.

Yeah, I guess I got lucky - at least with the Mid-America account. I assume New Millennium wasn't so keen on closing the account because that would have forced them to return my security-deposit.:smileywink:

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jetsfan2012
Posts: 208
Registered: ‎05-28-2012

Re: What happens to existing credit cards after a BK?

My ex mother in law told me when she filed BK about 7 years ago, he was surprised his Sears CC that was opened back in 1979 survived it. She was able to see her scores bounce back into the 700s within a year after discharge

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