Can you keep any credit cards?

[mistyz]

My husband and I are in the beginning stages of filing for bankruptcy...and just researching everything right now. We are curious as to if we file chapter 7, do they allow you to keep at least one credit card for emergencies? Any help would be appreciated. Thank you.

[keepsmiling]

No. Generally speaking.
One atty we spoke to told us we had to turn them over to her.
This gets discussed fairly often here. Occasionally folks have one that survives for whatever reason. But, it might be shut down at any time.
Many have gotten new cards, usually secured, fairly soon after discharge.
I know it's hard, after living on cc's, to get used to a whole new way of thinking/living. We are panicking right now about how to pay our health insurance , which must be paid a year at a time (thru school) , without a cc. It's going to be very hard. Not really sure what to do, we may be without it again for awhile. We can't seem to get the cash together to pay the atty AND pay for health. Frankly, it sucks to be here.
Good luck!

[MSbklawyer]

My husband and I are in the beginning stages of filing for bankruptcy...and just researching everything right now. We are curious as to if we file chapter 7, do they allow you to keep at least one credit card for emergencies? Any help would be appreciated. Thank you.

There's no law that says you can't keep a credit card. You can't incur new debt while your case is pending, but after it's over if you still have an active card you are completely free to dig yourself back into that hole again. In most cases, however, your card issuers will cancel your accounts when you file bk even if you have a zero balance.

But you are putting yourself at a disadvantage right from the start and you are taking the first step back down that road that leads so many people to bankruptcy in the first place by trying to keep a credit card "for emergencies". Emergencies are what savings accounts are for. Keep a debit card for paying at the pump, hotel reservations &c.

Change your whole way of thinking about debt. Savings to cover emergencies, not the potential to incur debt.

[AngelinaCat]

Or do as my DH and I do: put a $100.00 bill folded up in a secret place in our wallets and FORGET about it. This is for a TRUE emergency such as breaking down in the middle of the most dangerous stretch of I-26 in the Smokey Mountains, and having to depend on a roll-back truck driver to get you out of harm's way. Such a person usually does not take credit cards or checks.

You might want to check out this thread:

http://www.bkforum.com/showthread.php?72485-The-Secret-Stash

My best wishes to you, and welcome to the Forum.

[DYLAN150]

AngelinaCat: That 100 bucks must be for a taxi ride, most tow trucks are more than that! I took out a small policy on my auto insurance to pay for a breakdown. I have had 3 breakdowns in 40 years and hate it. Two in California and one in Hononlulu.

[AngelinaCat]

It's what we had at the time, and the rollback driver accepted it. We had no other cash, cards. or anything else. That was it.

[kornellred]

I paid for my Chapter 7 bankruptcy (in 1993) with a $2000 cash advance on a credit card. (not lying, true story) My attorney warned me not to list the debt on my creditor matrix, because that would be obvious fraud. The bank which issued the credit card from which I took the advance never reacted at all to my bankruptcy, and I just kept making payments as though nothing had happened. It was all too easy to discharge debts back in those halcyon days - which is probably why the BAPCPA of 2005 came about.
As an interesting (and cynical) aside - I kept that credit card until my Chapter 13 filing in March 2008, at which point I owed close to $20,000 on it (I had that card for close to 25 years). At the completion of my Chapter 13 plan, they will recover about $6000 of the debt. Shame on me.

[frogger]

There's no law that says you can't keep a credit card.

I have seen a trustee however, that specifically asked debtors if they still have credit cards in their possession. If the answer was yes, they were told to give them up and the trustee cut them up in front of the filers.

Loved it.

[drowning123]

Cutting up the card, in the the long run, is for the debtor's benefit.

[mdl]

Ha! Should I take my ziplock bag full of my shredded cards to my 341 meeting on Thursday just for the fun of it?
I offered them to my atty at our signing appt but he didnt want them.

[drowning123]

Lol

[lillymarlene]

I'm slightly hard of hearing and once in awhile I can miss things. Last year just before filing my chap 13, my attorney asked me if I had stopped using credit cards. I said that I was still using one, just for electronic payments and small purchases. He nearly went ballistic, saying that could be considered fraud.

Well, I immediately went home and transferred those small recurring online payments to my debit cards. This really was the end of my 30 year old card habit. :-) Honestly, I hope to never, certainly with those ridiculously high limits originally offered by the banks, to have credit cards like that again.

[AngelinaCat]

Just be careful of the debit cards, too. Most can be used as 'credit cards' with the same protection as regular ccs, to reverse a wrong charge etc.

However, if you have an Overdraft Protection account attached to your checking account, it is easy to keep using the debit/credit card until the balance runs out. That means you have overdrawn your checking account. But, when the money runs out, the card stops working. That is a GOOD thing. But it shouldn't be. We are adults and should be disciplined enough to deal with our spending.

CONFESSION: I have that problem, and am working very hard on it.

Please be careful, and do not make this YOUR problem.

My cautionary best wishes~~~