@StartingOver10 wrote:
@Anonymous wrote:Hello,
I am thinking bout filing for Chapter 7 bankruptcy down the road due to mostly medical collections. I was currently in need of a credit card. After Applying for a few and getting declined, I got a secured credit card with a credit limit increase in 5 months (unsecured). Ive also now been aproved for an unsecured card for $750 and a store credit card for $400. My question is what would be the best way to keep these open after the bankruptcy. Ive read that if there is no debt to them they dont have to be part of the bankruptcy, which I keep all close to a 0 balance so thats fine. With doing that ive ready that companys have a tenancy of still closing out your accounts after a bankruptcy. Ive also read about reafirming the debt, which I understand as agreeing to pay the debt and keep the specific account out of the bankruptcy. Not sure what is the better route, going in with 0 debt and good payment history, or having some debt I owe them and promising to pay them to keep my accounts open?
The best thing to do, if you are sure you are going to file Bk, is to close the zero balance cards. You can't keep them open during a Bk. They will be notified and close your accounts. Every once in a while one slips through but that is not an action to rely on by any means. Since you have low limits, pay off the cards before you file but ask your Bk attorney first - to make sure it is the right thing to do.
If you close the zero balance accounts they will be much easier to reopen without having the IIB notation on your credit report for each of those new accounts.
Don't mess around with this. Close them before you file - especially if they are zero balance.
Well put, StartingOver. Just to add/clarify, if you close your credit cards prior to BK, they will continue to be "Satisfactory" or positive accounts on your CRs. Very helpful for when you rebuild. 