Credit cards are a part of daily life for most people, which makes this one of the more personal questions that comes up when someone is considering bankruptcy. The idea of losing access to credit entirely can feel alarming, especially when you are already navigating financial stress. At Law Offices of Terrence Fantauzzi, we help clients in California understand exactly what to expect when it comes to their existing credit accounts and their ability to rebuild credit after filing.
What happens to my credit cards when I file for bankruptcy?
In most cases, your credit card accounts will be closed when you file for bankruptcy. When you list your creditors in your bankruptcy petition — which you are required to do — your credit card issuers will be notified of the filing. At that point, virtually all of them will close your accounts, regardless of whether you owe a balance or not. This happens even on cards where you have a zero balance.
Can I leave a credit card off my petition to keep it?
No. Federal bankruptcy law requires you to list all of your creditors and all of your debts. Intentionally omitting a credit card account from your petition is considered fraud and can result in serious consequences, including the dismissal of your case or denial of your discharge. There are no exceptions to this requirement.
What if I have a card with a zero balance?
Even if a credit card has no balance, the issuer will typically close the account once they are notified of your bankruptcy filing. Lenders regularly monitor bankruptcy filings and will act on that information whether or not they are owed money. It is best to go into the process with the understanding that all of your existing credit card accounts will likely be closed.
Can I reaffirm a credit card debt to keep the account open?
Reaffirmation is a process in bankruptcy that allows you to agree to remain personally liable for a specific debt in exchange for keeping that account or asset. It is most commonly used for secured debts like car loans. For credit cards, which are unsecured debts, reaffirmation is rarely an option and is generally not in your best financial interest. Most credit card issuers will not agree to reaffirmation, and most bankruptcy attorneys will advise against pursuing it.
Will I ever be able to get a credit card again?
Yes. While bankruptcy does affect your credit, it does not permanently prevent you from obtaining new credit. Many people begin receiving credit card offers within a year or two of their discharge. These initial offers often come with higher interest rates and lower credit limits, but they can be useful tools for rebuilding your credit history when used responsibly.
Secured credit cards, which require a cash deposit as collateral, are a common starting point for people rebuilding credit after bankruptcy. Over time, consistent and responsible use of new credit can help restore your credit score significantly.
How long will bankruptcy affect my ability to get credit?
A Chapter 7 bankruptcy remains on your credit report for ten years from the filing date, while a Chapter 13 bankruptcy remains for seven years. However, its impact on your ability to obtain credit tends to lessen over time, particularly as you build a positive payment history after your discharge.
Ready to Understand Your Options?
Bankruptcy involves real trade-offs, and understanding them fully is the best way to make a confident decision. Call (909) 552-1238 to speak with an attorney at Law Offices of Terrence Fantauzzi and get honest answers about what filing for bankruptcy means for your financial future.
