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Filing Chapter 7 - Can I Keep a Credit Card?

Treatment of unsecured creditors in chapter 7 bankruptcy

I get this question on a weekly basis: can I keep one of my credit cards if I file bankruptcy? A lot of times people want to keep one credit card for a rainy day. I completely understand this, and would want the same kind of "backup" plan in case of a bad month.

There are some problems with this. The first is that all creditors have to be treated the same when you file bankruptcy. When you file a bankruptcy case, no matter if it's chapter 7, chapter 13, etc, you have to list all creditors, no matter how big or small. Why? You cannot prefer one creditor at the expense of other creditors. It is not fair to pay one creditor, and not all the other creditors.

If the account in question is a zero balance, technically it is not a debt and would not have to be listed. The issue here is that, even though you would not notify the creditor of your bankruptcy case, the creditor would most likely become aware of your bankruptcy petition from your credit report, and close the account.

Not listing a creditor is a big deal. In your bankruptcy petition and at your 341 meeting of creditors, you will be asked to testify under oath that you listed all of your creditors. Not fully disclosing creditors could result in severe penalties. For this and a plethora of other reasons, it is ALWAYS important to get an attorney if your considering bankruptcy.