Do I Really Have To List All of my Credit Cards in my Bankruptcy?
Many households that may be facing financial difficulties have several different credit card accounts. While credit cards can get you into financial trouble due to high interest rates and ballooning balances, some credit cards can have benefits for your household. Certain accounts may offer rewards such as airline miles or cash back that can help fund a family vacation or holiday gift purchases.
When you file for Chapter 7 bankruptcy and seek to have your unmanageable credit card debt discharged, your accounts will be closed as part of the discharge. You may wonder whether it is possible to keep certain rewards accounts or other cards that may have low balances simply so you have access to credit.
Listing Accounts on Your Bankruptcy Petition
When you file for bankruptcy, you must inform the court of ALL of your debts. This means that you must list every credit card that has a balance or that you have paid toward in recent months. If you fail to list a credit card or try to hide it from your bankruptcy trustee with the hope you can keep it, you may be making a serious mistake. You disclose your debts to the court under oath and lying under oath can have consequences and may even result in the dismissal of your case without a discharge.
If the card you want to keep has a zero balance at the time of your petition and you have made no recent payments, you will not necessarily have to disclose the account. However, you may find that the credit company will close your account after your bankruptcy is final anyhow. Credit companies regularly check the credit performance of their account holders and cancel accounts if new derogatory marks – such as bankruptcy – show up on their credit. This means that if you pay off a card simply in hopes of keeping it after bankruptcy, you may have wasted that money since the account may simply be canceled by the credit company. Instead, it may be wise to include that balance in your bankruptcy.
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If you are considering bankruptcy, you likely have many questions and concerns about the legal process and your life after bankruptcy. At the Law Office of Michael Alan Siddons, we help clients in New Jersey, Pennsylvania, and Maryland through every stage of their bankruptcy case, so call today for more information.