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The use of credit cards in the middle of a bankruptcy

On Behalf of | Oct 21, 2020 | Personal Bankruptcy

The process of going through bankruptcy can take a great amount of long-term emotional and mental stress on someone. In addition to that level of stress, it can also raise a number of financial questions which only add to the amount of internal turmoil. North Carolina residents often wonder if they are allowed to keep credit cards after they have filed for, and received a bankruptcy order from a court.

Why credit cards are beneficial

While the debt that can accumulate on a credit card can often be a reason that people have to file for bankruptcy, they are also the way that many people stay afloat month to month. In essence, bankruptcy freezes an individual’s credit file, which prevents them from being able to apply for any new credit until after the case has been ruled on.

Can you keep credit cards after bankruptcy?

Typically, the answer to this question is no. In bankruptcy filings, all creditors must be treated the same, which means that existing debt will be discharged if the court so rules. Ultimately, it is unfair to creditors for someone to have their debt to one company discharged while they continue to accrue, and repay, debt to another company.

All credit cards must be listed in a bankruptcy filing. It is important to note that even credit card accounts with no active balance must be listed when filing for bankruptcy. Once notified, the credit card company will suspend the credit privilege of the person listed on the account.

While bankruptcy does prevent an individual from continuing to use the credit cards that they already have, it does not put them in a position to never be able to have another. Working with a bankruptcy attorney who knows both state and federal bankruptcy laws puts the petitioner in a position to bounce back from bankruptcy and begin rebuilding their finances.


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