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

[Anonymous]

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)

[Anonymous]

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.

[Anonymous]

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.

[ruafraidofme]

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

[Anonymous]

---

@Anonymous 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.

[Anonymous]

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.

[Scupra]

---

@Anonymous 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.

[Anonymous]

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!

[Anonymous]

---

@Scupra wrote:

---

@Anonymous 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?

[Scupra]

---

@Anonymous wrote:

---

@Scupra wrote:

---

@Anonymous 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.