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keeping some credit cards in ch7

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keeping some credit cards in ch7

My credit is good today, but any day I will have a 30 day late on there. While it is still good, should I get a new credit card? Are there any that will let me keep them through/after bankrupcy if I have a $0 balance before filing?

 

Can I use one of my cards with a $0 balance after I file ch7?

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Regular Contributor

Re: keeping some credit cards in ch7

You can't keep any cards in ch7. Every account is included r regardless of their balance or payment history.
BK CH7 Discharged 03/2015
FICO8 EQ-657 TU-657 EX-665
Revolving credit lines 125k.
Message 2 of 9
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Re: keeping some credit cards in ch7


@washpadude wrote:
You can't keep any cards in ch7. Every account is included r regardless of their balance or payment history.

Yes, ^^^ this is exactly right.

 

OP, there is one thing to do before you file Bk, close all of your zero balance accounts.  This way you preserve your good rating on the card with that creditor. If you close before filing, it will just say zero balance, have the positive history and no indication that it was included in bankruptcy - because you don't include closed tradelines. 

 

This will make it easier when you go to rebuild after your discharge because you will have several positive accounts reporting - even though they are closed. KWIM?

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Re: keeping some credit cards in ch7

I agree close all the ones with zero balance and don't use any before filing.  I'm waiting to file Chap 7 and I wish I had known it would be such a long wait.  I closed my accounts back in November and won't file until early March.  It's been hard but I'm learning to live without credit.  Will be so happy for the fresh start!!!

Filed Ch 13- 8/29/17
Message 4 of 9
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Re: keeping some credit cards in ch7


@washpadude wrote:
You can't keep any cards in ch7. Every account is included r regardless of their balance or payment history.

Actually, that's not quite accurate. Every debt must be included, but a credit account with $0 balance is not a debt. From Nolo.com:

 

You have to disclose all of your debts on your bankruptcy papers. This includes all credit cards with a balance. However, if you don’t have a balance on a credit card, it is technically not a debt. This means that you don’t have to list credit cards with a zero balance.

 

I had 2 accounts w/$0 balance in my 2010 BK7 and I did not include them in my list of debts. Lowes hadn't been used in some time. But I included other Synchrony accouts with balances and when they received notice on those they immediately closed Lowes. However, it is a postive tradeline on my CR, "paid as agreed, closed by credit grantor". I also had Bill Me Later (now PayPal Credit) w/$0 balance. I had no other accounts with commenty, so they didn't learn of my BK filing and kept the account open, I still have it today. But I knew not to charge anything on it until after discharge.

 

But the more pertinent parts of Drowning's questions:

 

 " My credit is good today, but any day I will have a 30 day late on there. While it is still good, should I get a new credit card?"

- Absolutely not. Applying for credit when you intend to file BK can be considered and attempt to defraud.

 

"Can I use one of my cards with a $0 balance after I file ch7?"

- Abgsolutely not. You cannot incur any new debt until your old debt is discharged. You do things like app for  new credit card right before filing & then charging on it during BK and you run the risk of PO'ing your Trustee enough that they might file to dismiss your BK on grounds of fraud. If your BK were to be dismissed you would be on the hook for your current debt, and cannot re-file for some time. Be very careful & very honest in filing & during your BK. And Nolo.com is a great resource for this and your other questions.


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Re: keeping some credit cards in ch7


@drowning1 wrote:

My credit is good today, but any day I will have a 30 day late on there. While it is still good, should I get a new credit card? Are there any that will let me keep them through/after bankrupcy if I have a $0 balance before filing?

 

Can I use one of my cards with a $0 balance after I file ch7?


If your credit is good and you just have a 30 day late payment that is not yet posted, maybe you do not have to file bankruptcy.  Obviously, I don't know all the facts, but there may be a less drastic solution for you.

Message 6 of 9
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Re: keeping some credit cards in ch7

Not true.  

 

If you didn't include zero balance accounts in your filing then its up to the grantor, four instance  AMEX kept 4 accounts open after our 7.

Message 7 of 9
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Re: keeping some credit cards in ch7

I wouldn't count on the creditor keeping a zero balance account open during and after your Bk. As pointed out above, it is strictly up to the creditor.  Assume they will close the account when you file even if you don't owe anything because the big creditors can, and do, cross check your SS # against the newly filed Bk's regularly. It is a service offered by the CRA's to the creditors. If a creditor decides to let it show active and leave it open, that is more the exception than the rule. 

Message 8 of 9
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Re: keeping some credit cards in ch7

Agree NOLO is a great online resource for questions. My lawyer suggested that I close all accounts with $0 balances which I did and they are all reporting closed by consumer. May help after discharge with some creditors like Target, less likely with Synchrony since Walmart, Sams, Amazon, QVC and Tire Discount will all be included even though I closed my Lowe's account with $0 balance.
Filed Ch 13- 8/29/17
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