Can I Keep One of My Credit Cards Out of My Bankruptcy?

People often ask if it’s okay to leave one of their credit cards out of their bankruptcy because they
would like to keep it for emergency use.

First of all, if you have a credit card that doesn’t have a balance and hasn’t for some time, you don’t
need to list it on your list of creditors in bankruptcy.

If there is a relatively small balance on a card, then some people try to pay it off before filing
bankruptcy, hoping this would allow them to use the card after the bankruptcy.

There are two potential risks in doing this. Even though you are not carrying a balance, the issuer of
the card can check your credit, including the bankruptcy filing, and may think that you’re more of a risk and they may or may not close the account. More importantly, however, paying off one or more creditor prior to bankruptcy filing may be considered a “preference” (depending on the type of creditor and amount of payment), and the trustee can require those assets be brought back into the bankruptcy proceeding in order to be used for all creditors.

​Many consumers are surprised when they receive numerous offers of credit immediately after their discharge in bankruptcy. (Credit card companies know that you don’t owe any debts now and
you won’t be able to file another bankruptcy for another 4 to 8 years in most cases.)

Most people get one or two cards with low interest rates and fees and use them to help re-establish their credit by paying off the balances each month.

The information contained on this site is for general education only and it is not, nor is it meant to be, legal advice.  You should seek advice from a bankruptcy attorney for your specific situation.