Can I Keep One Of My Credit Cards When I File For Bankruptcy?

26 Oct Can I Keep One Of My Credit Cards When I File For Bankruptcy?



Can I keep one of my credit cards when I file for bankruptcy?

A common question heard by bankruptcy attorneys and a common temptation.

And understandable!

In today’s world, it is almost impossible to rent a car or reserve a hotel room without a credit card.

Sure, you can use your debit card, but many hotels and rental car agencies take a deposit that is larger than the estimated charge when you use a debit card, and this ties up money that you would otherwise have available to you.

And what about that “emergency” that you may have that requires a credit card?

The answer to whether you keep one of your credit cards when I file for bankruptcy is no. There are both legal and practical reasons for this:

  • Under the Bankruptcy Code, you cannot favor one unsecured creditor over another.
  • The company that issued the credit card will know almost immediately that you have filed for bankruptcy through a notice from one of the Credit Reporting Agencies (Equifax, Experian or Transunion). When the credit card company learns of your bankruptcy, it will cancel the credit card.
  • Credit cards are one of the major reasons why people end up filing for bankruptcy! Do you really want to keep a credit card and start incurring debt again?
  • When you file a bankruptcy you must list all of your assets and debts. Failure to do so can result in your bankruptcy being delayed, or dismissed, and if the Bankruptcy Court determines that you were attempting to commit a fraud on the court, the failure to list the credit card could result in fines or jail time.

The above list is not exhaustive, but the bottom line is: Don’t try to keep a credit card when filing for bankruptcy. Tell your attorney about all of your debts.

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I've been a consumer bankruptcy lawyer for nearly 25 years. Since that time I have helped many people resolve their financial problems. I have been practicing law since 1986 and I am licensed to practice in all state and federal courts in the State of Louisiana. Because I am a sole practitioner, you know that your debt matters are being handled by me personally. In addition to my work with consumers, I am also frequently asked to speak at local seminars on bankruptcy law. I am member of the following organizations: • Louisiana Bar Association • National Association of Consumer Bankruptcy Attorneys • Bankruptcy Law Network My office is located at: 3920 General DeGaulle Drive, New Orleans, LA 70114 Telephone: (504) 368-4101

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