• Heather A. Harwell, Esq.

Can I Keep Credit Cards Out of My Chapter 7 Bankruptcy?

Bottom line, no. The bankruptcy estate is much like a probate estate. Once you file your petition, your financial estate is essentially handed over to the trustee. The bankruptcy trustee is tasked with finding assets to pay as much to your creditors as possible. The only way to keep assets in your estate from being distributed is to apply an exemption to them. Bankruptcy laws are designed so that the result of the bankruptcy does not favor one creditor over the other. You are required to report all creditors in your schedules. It would be unfair for you to pay one creditor and not another simply because you want the ability to obtain further credit. Regardless, even if you had a "0.00" balance on the account, once the bankruptcy is reported to Equifax, Experian and Transunion, most creditors automatically post a designation of "bankruptcy" and close the account. Also, keep in mind that use of credit cards may have put you in the position where you need to file a Chapter 7 Bankruptcy. Continuing the use of credit is likely to put you back on the same financial path. The only way to take full advantage of a Chapter 7 Bankruptcy is to figure a way to live within your means and stick to that plan.