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To close or not to close accounts... that is the question.

SerpenSortia
Valued Member

To close or not to close accounts... that is the question.

I am preparing to file BK7 and have been doing a lot of research both here and through other sources online. I have a few cards with zero balances. It is my understanding that open accounts with a zero balance at the time of filing do not have to be included in the petition because they are not a debt, nothing is owed. For those accounts that are not included things can go one of two ways: either the creditor closes the account when they catch wind of your BK even if they are not affected, or the account can survive the BK and continue to report as a positive tradeline.

 

So my question is, what are the negative effects on your score/reports of an account showing closed by creditor if it is otherwise positive (no late payments ever etc) compared to closing the account out yourself? Is it worth the risk of these accounts being closed by creditor if there is a chance they can survive instead?

 

Also, these are my zero balance accounts. Can anyone chime in if they have experience going through BK7 with an open/zero balance account through these companies and tell us what happened to the accounts?

 

NFCU Secured Card (I also keep my checking and savings accounts with them, do not have anything that would affect them in BK)

Nebraska Furniture Mart

Victorias Secret (Commenity)

JCrew (also Commenity)

 

Message 1 of 20
19 REPLIES 19
SteelerNYC
Valued Contributor

Re: To close or not to close accounts... that is the question.

99 times out of 100, even your $0 balance accounts will be closed when those creditors get wind of your BK.  

 

Close them yourself before filing.

Ch 7 Discharge May 2015
Discover/Target/NFCU CLOC/NFCU More Rewards Amex/NFCU Platinum/PenFed Power Cash Rewards/PenFed Pathfinder Visa/Citi Costco Visa/CapitalOne SavorOne/Apple Card - $139,100 total revolving, 21% utilization
3.25% mortgage July 2020, $20k used Auto Loan October 2020, $20k PenFed Personal Loan Dec 2020
687/683/673 EX/EQ/TU w/ 5/6/6 INQs as of Jan 2021
Spending 2021 in the Garden
Message 2 of 20
SerpenSortia
Valued Member

Re: To close or not to close accounts... that is the question.

I get that it is most likely to happen. I am just asking what, if any, negative affect it has on the reports/scores directly if the accounts are closed by the creditor versus myself. Data points I guess is what I'm looking for.

Message 3 of 20
ruafraidofme
Established Member

Re: To close or not to close accounts... that is the question.

the secured card has a savings account tied to it which is an asset that you would need to also list.

Message 4 of 20
SteelerNYC
Valued Contributor

Re: To close or not to close accounts... that is the question.


@SerpenSortia wrote:

I get that it is most likely to happen. I am just asking what, if any, negative affect it has on the reports/scores directly if the accounts are closed by the creditor versus myself. Data points I guess is what I'm looking for.


I didn't know this before I filed so can't vouch for it, but I heard it's advantageous for your score to close them yourself.

Ch 7 Discharge May 2015
Discover/Target/NFCU CLOC/NFCU More Rewards Amex/NFCU Platinum/PenFed Power Cash Rewards/PenFed Pathfinder Visa/Citi Costco Visa/CapitalOne SavorOne/Apple Card - $139,100 total revolving, 21% utilization
3.25% mortgage July 2020, $20k used Auto Loan October 2020, $20k PenFed Personal Loan Dec 2020
687/683/673 EX/EQ/TU w/ 5/6/6 INQs as of Jan 2021
Spending 2021 in the Garden
Message 5 of 20
SteelerNYC
Valued Contributor

Re: To close or not to close accounts... that is the question.

I think it's:

 

Closed by creditor during BK = removes account history from Fico score calculation

 

Closed by consumer = continues factoring positive history and AAoA into Fico score

 

Perhaps another member here can confirm that for me.

Ch 7 Discharge May 2015
Discover/Target/NFCU CLOC/NFCU More Rewards Amex/NFCU Platinum/PenFed Power Cash Rewards/PenFed Pathfinder Visa/Citi Costco Visa/CapitalOne SavorOne/Apple Card - $139,100 total revolving, 21% utilization
3.25% mortgage July 2020, $20k used Auto Loan October 2020, $20k PenFed Personal Loan Dec 2020
687/683/673 EX/EQ/TU w/ 5/6/6 INQs as of Jan 2021
Spending 2021 in the Garden
Message 6 of 20
Scupra
Super Contributor

Re: To close or not to close accounts... that is the question.


@SteelerNYC wrote:

I think it's:

 

Closed by creditor during BK = removes account history from Fico score calculation

 

Closed by consumer = continues factoring positive history and AAoA into Fico score

 

Perhaps another member here can confirm that for me.


This exactly.. If the card is closed by you, the payment history will continue to report. If the creditor closes it due to BK, the payment history will be wiped.

Filed BK7: 7/2012 (start score EQ 560 / TU 529) Discharge 10/2012
759 EQ FICO 03/2021
754 TU FICO 03/2021
743 EX FICO 03/2021
$29k NFCU Platinum | $30k NFCU cashRewards Sig | $15k NavChek | $7.1k Cap1 Quicksilver | $10k Amazon Store | $19k Cap1 VentureOne | $16k Barclay Aviator | $5k Chase Freedom | $5k Chase Sapphire Preferred | $9k Costco Visa | $20k AMEX BCE | AMEX Gold
Message 7 of 20
SerpenSortia
Valued Member

Re: To close or not to close accounts... that is the question.

Good to know! That makes sense and I will definitely close them then. Just wanted to see what the forum had to say as I am still awaiting that discussion with my attorney. Thanks everyone!

Message 8 of 20
NormanFH
Super Contributor

Re: To close or not to close accounts... that is the question.


@Scupra wrote:

@SteelerNYC wrote:

I think it's:

 

Closed by creditor during BK = removes account history from Fico score calculation

 

Closed by consumer = continues factoring positive history and AAoA into Fico score

 

Perhaps another member here can confirm that for me.


This exactly.. If the card is closed by you, the payment history will continue to report. If the creditor closes it due to BK, the payment history will be wiped.


TU shows my payment history as wiped, according to my free annual credit report, but EQ and EX both show lates in the months leading up to my filing when I look on Credit Check Total. Do I need to try to get these removed?

Most Recent FICO 8 Scores EX616/TU587/EQ607 01/09/2018 Starting scores 553/485/543 08/25//2017
~~~Credit lines~~~~
SDFCU VISA Secured $250
Discover Secured $200
Message 9 of 20
Scupra
Super Contributor

Re: To close or not to close accounts... that is the question.


@NormanFH wrote:

@Scupra wrote:

@SteelerNYC wrote:

I think it's:

 

Closed by creditor during BK = removes account history from Fico score calculation

 

Closed by consumer = continues factoring positive history and AAoA into Fico score

 

Perhaps another member here can confirm that for me.


This exactly.. If the card is closed by you, the payment history will continue to report. If the creditor closes it due to BK, the payment history will be wiped.


TU shows my payment history as wiped, according to my free annual credit report, but EQ and EX both show lates in the months leading up to my filing when I look on Credit Check Total. Do I need to try to get these removed?


Oh no, EX is the only CRA that left all my payment history on accounts. TU and EQ just deleted everything it seems like. Any lates reporting prior to your filing date will remain unfortunately.

Filed BK7: 7/2012 (start score EQ 560 / TU 529) Discharge 10/2012
759 EQ FICO 03/2021
754 TU FICO 03/2021
743 EX FICO 03/2021
$29k NFCU Platinum | $30k NFCU cashRewards Sig | $15k NavChek | $7.1k Cap1 Quicksilver | $10k Amazon Store | $19k Cap1 VentureOne | $16k Barclay Aviator | $5k Chase Freedom | $5k Chase Sapphire Preferred | $9k Costco Visa | $20k AMEX BCE | AMEX Gold
Message 10 of 20
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