Open credit cards when starting chapter 7 case

[ben1381]

Is having open credit cards at the time of starting a chapter 7 case a red flag of some kind to the trustee? Should I close all accounts before filing if I decide to file?

[justbroke]

You do not have to close them. The only red flag, is if you've been using them alot, just before filing.

[AngelinaCatHub]

Once you file, the CC cards will be closed by the creditor, don't worry. Also as 'Justbroke" stated, when was last use? Ideal is 90 or more ago. 'Hub

[StartingOver08]

If you have a zero balance, you might consider closing them rather than having them closed iib (included in bankruptcy).

[IBroke]

If you have a zero balance, you might consider closing them rather than having them closed iib (included in bankruptcy).

Can a $0 balance account even be reported as IIB?

[StartingOver08]

Yes it can. Once you file the larger companies subscribe to a BK service to compare to their database and they will scrub their accounts against the filings.

Its a shame, because you don't owe any $$ - but then the account was closed due to BK rather than 'closed by consumer'.

[justbroke]

Can a $0 balance account even be reported as IIB?

Probably, if they close the account because of the Bankruptcy. This is all speculation of course. My Report reads everything from "Included In Bankruptcy" to "Paid" to "Wage Earner Plan" to "Pays as agreed".

Generally, an already closed account, won't get any IIB (or similar) designation. An open account that had a $0 balance... questionable.

[IBroke]

Probably, if they close the account because of the Bankruptcy. This is all speculation of course. My Report reads everything from "Included In Bankruptcy" to "Paid" to "Wage Earner Plan" to "Pays as agreed".

Generally, an already closed account, won't get any IIB (or similar) designation. An open account that had a $0 balance... questionable.

I'm curious because if it has a zero balance, you are not required to list it.
They are certainly allowed to close it due to BK, but I'm not sure if it's correct to "label" an account as IIB if in fact, it WASN'T part of your BK.

Although in a chapter 7, all your debt is automatically discharged - if listed or not - this isn't the case here either - since it was no debt.

I know for sure that I would dispute such a remark because it's simple not accurate.

[IBroke]

Yes it can. Once you file the larger companies subscribe to a BK service to compare to their database and they will scrub their accounts against the filings.

Its a shame, because you don't owe any $$ - but then the account was closed due to BK rather than 'closed by consumer'.

That's right - but there is adifference between "due to BK" and IIB.

Sure, they can close it. But IMO, I, as a consumer, have to right to accurate reporting. And and account that was not part of BK should not be reported as such - no matter what database they are using.

[justbroke]

I know for sure that I would dispute such a remark because it's simple not accurate.

Which is why you need to go clean up your credit report, anyhow, after being discharged and closed!!! There are just too many mistakes after having filed Bankruptcy.

[StartingOver08]

I understand what you are saying IBroke - it might be a difficult thing to change as although the balance was zero at the time of filing, the cause of the closing of the account was the BK filing.

I am not trying to be difficult - I just don't know how you could differenciate it with the CRA or the OC....????

[IBroke]

I understand what you are saying IBroke - it might be a difficult thing to change as although the balance was zero at the time of filing, the cause of the closing of the account was the BK filing.

I am not trying to be difficult - I just don't know how you could differenciate it with the CRA or the OC....????

That's not that difficult - It's just the difference between "closed due to BK" (a CHOICE the creditor made) and "IIB" (a legal term and fact). If it wasn't IIB, they shouldn't report it as such.

"Closed by creditor" would be the correct remark.

If they claim IIB, they should be able to show proof of that (how much was discharged etc.).

I can show the CRA that this creditor doesn't show up on my schedules and my balance was $0 at filing. You simply can't include a $0 balance in a BK - how should that work? How do you discharge a $0 debt? Where do you list it?

[IBroke]

Which is why you need to go clean up your credit report, anyhow, after being discharged and closed!!! There are just too many mistakes after having filed Bankruptcy.

Now that's for sure..