Can I exclude a secured BofA card from Chapter 7 filing?

[lomalindabk]

I'm filing Chapter 7 in California next month. I have two positive CC trade lines on CRs -- a secured credit card and I am an authorized user account on AMEX.

The secured card is through Bank of America and has been reporting for 18 months. I have a checking account with BofA and no other accounts from BofA will be included in BK. The AMEX has been reporting "paid as agreed" for a year.

I know these are weak accounts in rebuilding credit after BK, but I was thinking if I maintained them through Chapter 7 it's a kickstart to credit reporting when Chapter 7 is discharged sometime in NOvember 2014.

Aside from a "paid as agreed" car loan TL running 14 months now, these are the only positive TLs I have. All, I mean every single one of my other TLs report in collections or charged off.

Can I omit the secured card and authorized user status on the AMEX from my filing and keep those positive TLs rolling?

[Drazil65]

You must report everything, any creditor you have although the card may survive the chapter 7 and you might be able to keep using it. Do some research on this site regarding what you must report when you file. Good Luck!

[LadyInTheRed]

As Drazil65 says, you must list all debts on your BK petition. You could reaffirm the debt, but that is a really bad idea. But, I suppose reaffirming a secured card isn't as bad an idea since you would lose the savings that secures it if you don't. Even if you do reaffirm, there is no guaranty that the account would not be closed when you file.

If you need to file BK, your credit rating should be your last consideration. You will get credit offers after your BK and you will be able to rebuild your score.

That said, if you are only an authorized user on the AmX and not the account holder, it is not your debt, so do not need to list it on your BK. I don't think the BK will affect the AU status because your SSN is not associated with the account.

[lomalindabk]

Thanks for your replies.

[Pjmax]

I may be wrong, but if there is no debt to BOA, it does not have to be listed, however, If you have a 0 balance on your BOA secured, it may or may not stay open, but your security deposit is an asset that has to be reported. BOA will most likely be notified of your BK, whether or not it is through the court system or their own 3rd party public record service. It may be better if you closed the account, instead of having the account report as closed by credit grantor, not sure about that.

Be sure and ask your attorney about how this should be reported, if you don't close the account.

[lomalindabk]

Thanks. I have an e-mail into my attorney. Will wait to see what he says.

[LadyInTheRed]

I may be wrong, but if there is no debt to BOA, it does not have to be listed,

I think that's true. I was assuming there is a balance.

[lomalindabk]

I pay off BofA every month, and am keeping the balance at zero from now until filing and through anticipated discharge October 2014. I am still awaiting word from my attorney. I have no other loans, lines of credit, etc. from BofA.

My situation is somewhat unique. I became disabled, took a buyout from my employer in January 2008. I had stirling credit prior to then. Between the start of SSa Disability in August 2008, everything went into the tank. All of my past credit accounts are either charged off or sold to debt buyers. All of these accounts were charged off in 2010.

In essence default/charge off and collections (debt buyers) are at least four years old. Many accounts are scheduled to drop from my CRs in 2015.

So aside from the Bof A card, the authorized user status with American Express, and an auto loan showing a timeline as pays as agreed for 14 months, I have no other positive time lines -- Zip between 2010 and when I began some reestablishment of credit in early 2013.

I know I am jumping the gun with worrying about rebuilding credit prior to even filing in two weeks, but I let all of this fester for nearly four years until I regained some stability in my disability to handle my mess. I had hired an attorney in 2010 and began process to file, but had to withdrawal prior to even filing.

My only income is $2300 from SSA Disability and an early retirement of $700 a month. I know I'm judgment proof, but looking for some relief. Finally.

[LadyInTheRed]

I pay off BofA every month, and am keeping the balance at zero from now until filing and through anticipated discharge October 2014. I am still awaiting word from my attorney.

Your attorney will be able to tell you whether you have to list the card, but he won't be able to tell you whether BofA will close the account. I had several accounts with no balance that were not listed on my petition, including a couple of BofA accounts. All of them except an American Express card were closed.

[TXskyblue]

You also have to report the security on the account as an asset, and you have to find an exemption for it or risk losing it.

So, if you have $500 securing it, that $500 is an asset to report. If you have cash or wildcard expemptions still free, that can cover it.