Keeping a Credit Card in Chapter 7 Bankruptcy

You can keep a credit card in bankruptcy, but there are some considerations you need to be aware of.

If you file for Chapter 7 bankruptcy, can you keep a credit card so you can use it afterward? While it generally is not a good idea to keep a credit card in Chapter 7 bankruptcy, in most cases you can do it.

But keep in mind that if overspending contributed to your financial problems, you should avoid using credit cards after your bankruptcy. Of course, there may be times when you need a credit card, for example, to book a hotel or rent a car. So many people like to have one available, even if they don’t use it often.

Reaffirming Credit Card Debt in Bankruptcy

If you have credit cards when you file bankruptcy, then any card on which you owe money will be listed among your debts. Most credit card companies will allow you to keep the card if you reaffirm the balance and enter into a new agreement.

Reaffirming credit card debt in bankruptcy should be used only as a last resort, however, because once you do that, your debt won’t be discharged. Think hard about whether you really need that card, and read about your other options below.

Still, if you have a card with a very low balance, you might consider reaffirming. Ultimately, creditors will make the decision of whether this is an option in your specific case. But because companies don’t want to incur loss because of discharged debt, most will allow you to reaffirm the debt.

Credit Cards With a Zero Balance

If you have a credit card with a zero balance at the time of your bankruptcy, then you don’t have to list it among your debts. While that also means that you don’t have to notify the credit card company of your bankruptcy filing, chances are it may still find out about your situation. That could potentially lead to higher interest rates, so be aware of that possibility.

Getting a Credit Card After Bankruptcy

For many people, it's best to discharge credit card debt in the bankruptcy. If you really need a credit card after bankruptcy, you can explore other options such as getting a secured credit card or a cosigner on a traditional credit card. Once you've spent six months to a year making on-time payments, you can apply for a regular credit card.

To learn about these options and other ways to get a credit card after bankruptcy, see How to Get a Credit Card After Bankruptcy.

Getting Help

If you want advice on whether you should reaffirm credit card debt during bankruptcy, consider consulting with a bankruptcy attorney.

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