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things to do before filing chapter 7

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things to do before filing chapter 7

Question... I have decided to file chapter 7 , I have already met with a lawyer I like so im ready.

 

My question is ... Should I close the credit cards that have already been paid off before I file chapter 7? 

I have about 7 credit cards and lines of credit that have been paid off for about a year or so. I had a $25 balance on a chase card so I just paid that off yesterday. 

Message 1 of 10
9 REPLIES 9
Frequent Contributor

Re: things to do before filing chapter 7

I would not close any accts in good standing.   Chances are they will be closed by grantor anyway, but some may survive your BK....and if they do, that gives you a big headstart into your credit rebuild.

Message 2 of 10
Established Member

Re: things to do before filing chapter 7

 


@twono wrote:

I would not close any accts in good standing.   Chances are they will be closed by grantor anyway, but some may survive your BK....and if they do, that gives you a big headstart into your credit rebuild.



thanks!.. yeah I will not close my cards especially my two chase cards, as I opened a checking account with them knowing I will be buring bOA.

Please God let those chase cards make it through BK!

Message 3 of 10
New Member

Re: things to do before filing chapter 7

I'm in the same boat, have my first lawyer meeting tomorrow.

 

Gonna keep mine open and hope they survive.

 

Good luck!

Message 4 of 10
Super Contributor

Re: things to do before filing chapter 7

It would look better on your reports under the comments. Closed by Consumer. Rather than Closed by Credit Grantor due to BK on any cards. You dont have to report closed accounts. Open yes. And if you try to hide them. Chase and the others will find out. Not a good idea. And you could risk the chance of having your BK dismissed.

 

No matter how important the card might be, excluding debt is not an option when you file for Chapter 7 bankruptcy. Bankruptcy law requires you to list all of your debt on your bankruptcy petition, without exception. In other words, if you owe a creditor money, the creditor must appear on your petition.

 

This rule, however, goes a step further. Even if you don’t owe a balance on your credit card, you must still list it in your bankruptcy papers. A revolving credit card account is a type of contract, and your contracts are automatically canceled by bankruptcy, including credit cards, leases, and secured auto loans, to name a few. As a result, once your credit card company finds out about the bankruptcy and realizes that it no longer has a contract, it will cancel your card because it won’t be able to enforce any ongoing obligations. Simply put, without a valid agreement in place, the credit card company will not be able to make you pay for your purchases.

 





Out of Commission until Wed due to working The IMSA Rolex 24 weekend. C-Ya!
Message 5 of 10
Valued Contributor

Re: things to do before filing chapter 7

By all means CLOSE THEM!

Your lawyer will list every creditor on your credit report on the bankruptcy matrix and provide notice to them.   Even with a zero balance they will list that account as "included in bankruptcy," which will score as a charge-off.    It will also be considered as an account included in bankruptcy and may delay or prevent you from getting back in with that creditor.   CLOSE EVERY ONE OF THOSE ACCOUNTS.

I closed a few zero balance accounts before filing and they simply show as "closed by consumer" with no negatives at all -- even though they were closed right before filing.   Had I left them open, they would have been listed as included in bankruptcy.

Sometimes people manage to get a store card to survive bankruptcy but that's not worth all the accounts that will hit you with a write-off -- even with a zero balance.

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Message 6 of 10
Established Member

Re: things to do before filing chapter 7


@CH-7-Rebuilding wrote:

By all means CLOSE THEM!

Your lawyer will list every creditor on your credit report on the bankruptcy matrix and provide notice to them.   Even with a zero balance they will list that account as "included in bankruptcy," which will score as a charge-off.    It will also be considered as an account included in bankruptcy and may delay or prevent you from getting back in with that creditor.   CLOSE EVERY ONE OF THOSE ACCOUNTS.

I closed a few zero balance accounts before filing and they simply show as "closed by consumer" with no negatives at all -- even though they were closed right before filing.   Had I left them open, they would have been listed as included in bankruptcy.

Sometimes people manage to get a store card to survive bankruptcy but that's not worth all the accounts that will hit you with a write-off -- even with a zero balance.


OK so I guess I'll close my chase card... Will I be able to use the checking still? or should I just close chase checking and go with wells fargo as my big 4 bank? 

 

I also have a best buy card,  west elm card and , dell line of credit - all with zero balances... should I let those store cards stay open and gamble that they survive chapter 7??

 

thanks for the help guys!

Message 7 of 10
Member

Re: things to do before filing chapter 7

That's odd, my lawyer said that credit cards with zero balances will not be included in the 7 petition because you do not owe them money (they aren't debt). He left cards out of my chap 7. The bk doesn't get rid of your contracts that aren't listed in your paperwork. I actually had a medical bill survive because the bill was split up and part of it came from a 3rd party, not the doctor, and I was unaware when filing. I didn't want to pay the fee to amend because the balance was low, but it was okay that the debt was prior to filing because I was "unaware" of it, aka honest mistake.

Message 8 of 10
Valued Contributor

Re: things to do before filing chapter 7


@Crypt0Dude wrote:

@CH-7-Rebuilding wrote:

By all means CLOSE THEM!

Your lawyer will list every creditor on your credit report on the bankruptcy matrix and provide notice to them.   Even with a zero balance they will list that account as "included in bankruptcy," which will score as a charge-off.    It will also be considered as an account included in bankruptcy and may delay or prevent you from getting back in with that creditor.   CLOSE EVERY ONE OF THOSE ACCOUNTS.

I closed a few zero balance accounts before filing and they simply show as "closed by consumer" with no negatives at all -- even though they were closed right before filing.   Had I left them open, they would have been listed as included in bankruptcy.

Sometimes people manage to get a store card to survive bankruptcy but that's not worth all the accounts that will hit you with a write-off -- even with a zero balance.


OK so I guess I'll close my chase card... Will I be able to use the checking still? or should I just close chase checking and go with wells fargo as my big 4 bank? 

 

I also have a best buy card,  west elm card and , dell line of credit - all with zero balances... should I let those store cards stay open and gamble that they survive chapter 7??

 

thanks for the help guys!


Chase Checking shoud be fine. You don't want to use Wells Fargo as your bank through a BK. My lawyer advised me to get my $$ out of there as they have a history of freezing accounts due to BK.

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Message 9 of 10
Valued Contributor

Re: things to do before filing chapter 7


@tlc2 wrote:

That's odd, my lawyer said that credit cards with zero balances will not be included in the 7 petition because you do not owe them money (they aren't debt). He left cards out of my chap 7. The bk doesn't get rid of your contracts that aren't listed in your paperwork. I actually had a medical bill survive because the bill was split up and part of it came from a 3rd party, not the doctor, and I was unaware when filing. I didn't want to pay the fee to amend because the balance was low, but it was okay that the debt was prior to filing because I was "unaware" of it, aka honest mistake.


Technically a debt doesn't have to be listed in order to be included in your bankruptcy . . a BK discharges ALL debts.

 

I had a similar medical bill and sent them a letter with a copy of my discharge notice and that was that.

Ch 7 Discharge May 2015
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Message 10 of 10
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