Do I Have to File Bankruptcy all my Credit Cards?

28 Jan Do I Have to File Bankruptcy all my Credit Cards?

Clients frequently ask me if they have to file bankruptcy on everything.  To put it another way, they may have one special asset they don’t want to “file bankruptcy on.”  Then, clients also ask me, “Do I have to file bankruptcy on all my credit cards?”  The answer is – Yes – you have to file bankruptcy on everything you own and all debts you owe.

“Do I have to file bankruptcy on my car?”  Yes.   Your bankruptcy case covers 100% of your assets and 100% of your debts.  You can’t pick and choose.  You may be able to keep certain assets because they are exempt.  In addition, you may be able to retain certain assets on which a creditor has a lien – like your car – because you decide to continue to pay the debt to the creditor under a “reaffirmation agreement.”  

“Do I have to file bankruptcy on my engagement ring?”  Yes.  An engagement ring is an asset.  Depending on the value of the ring and your state’s law, it may well be exempt but it still needs to be “included in the bankruptcy.”

I almost never suggest that a person continue to pay a credit card debt.  You are “filing bankruptcy on your credit cards” too.  First of all, bankruptcy will usually result in termination of the credit card.  Even if it doesn’t, the continued use of a credit card usually is not beneficial a person who files for bankruptcy.  Improper use of credit often is a reason that you ended  up in bankruptcy in the first place.

So, when you visit your bankruptcy lawyer, please don’t hold back any information.  Tell your bankruptcy lawyer everything, just like you would tell your doctor all of your symptoms.  Give your lawyer all of the facts and your bankruptcy lawyer will be able to protect you and your property to the fullest extent of the law.


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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.

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