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Can I keep my credit cards if I file for bankruptcy?

Can I keep my credit cards if I file for bankruptcy?

Full question:

Will I be allowed to keep my credit cards if I file bankruptcy?

Category: Bankruptcy
Date: 04/07/2025
State: Alabama

Answer:

When you file for bankruptcy, federal law requires you to list all your creditors, not just those whose debts you want to discharge. Some creditors may allow you to keep your credit cards and continue making payments, but this varies by creditor. Factors include your credit card balance at the time of bankruptcy, the creditor's policies, and your ability to convince them that you can and will pay future debts.

If you want to keep certain credit cards, you can attempt to negotiate a process called "reaffirming the debt" with the creditor, which means you agree to pay back what you owe. However, it's important to remember that credit card debt is often what leads individuals to file for bankruptcy in the first place. It's advisable to change spending habits and avoid repeating the same mistakes. Bankruptcy is intended to provide a fresh start, so it's best to take advantage of that opportunity.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Do you get to keep anything if you file bankruptcy?

Yes, when you file for bankruptcy, you may be able to keep certain assets, depending on the type of bankruptcy you file (Chapter 7 or Chapter 13) and the exemptions available in your state. Common exemptions may include your primary home, vehicle, and personal belongings up to a certain value. However, non-exempt assets may be sold to pay creditors. It's essential to consult with a bankruptcy attorney to understand what you can keep.

What cannot be wiped out by bankruptcies?

Certain debts cannot be discharged in bankruptcy, including student loans, child support, alimony, certain tax debts, and debts incurred through fraud. Additionally, secured debts, like mortgages and car loans, may require you to continue payments if you wish to keep the asset. Always consult a legal professional for specific guidance on your situation.

Is it better to stop paying credit cards or file bankruptcy?

Deciding whether to stop paying credit cards or file for bankruptcy depends on your financial situation. Stopping payments can lead to increased debt due to interest and fees, and may harm your credit score. Bankruptcy may provide a fresh start by discharging certain debts, but it also has long-term effects on your credit. Consulting a financial advisor or bankruptcy attorney can help you make an informed decision.

Do you lose your credit cards in bankruptcies?

In most cases, you will lose your credit cards when you file for bankruptcy, as they are considered unsecured debts. However, some creditors may allow you to keep your accounts if you reaffirm the debt and continue making payments. It's important to understand the implications of reaffirming debts and to consider changing your spending habits post-bankruptcy.