People are able to rebuild their finances and protect their futures by filing for bankruptcy. Debtors might, however, have to make certain adjustments in order to file for bankruptcy. One of the common questions among people is–Is it possible for debtors to keep their credit cards after filing for bankruptcy? To learn more, read about Chapter 7 Business Bankruptcy.
Can you retain your credit cards after filing for bankruptcy?
You can maintain credit cards after declaring bankruptcy if you depend on them for financial stability and credit development. In reality, after filing for bankruptcy, debtors rarely keep their credit cards. Every creditor must receive the same treatment during the bankruptcy procedure. Therefore, it would be unjust for someone to keep the $10,000 debt on their credit card while having their $10,000 discharged from a specific creditor.
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Will your credit card get canceled after filing for bankruptcy?
It is common for someone who is considering filing for bankruptcy to wish to “exclude” from the bankruptcy petition a specific debt, like a credit card that was used for company expenses or the costs related to taking care of a beloved pet. You cannot file for Chapter 7 bankruptcy with debt prohibited, no matter how significant the card may be.
1. Listing credit card debts
According to bankruptcy law, your bankruptcy petition has to include a complete list of all of your debts. To put it another way, a creditor to whom you owe money must be listed on your petition.
2. Losing unused Credit Card
Credit cards, leases, secured vehicle loans, and revolving credit card accounts are among the contracts that are instantly terminated by bankruptcy. Your credit card company will probably cancel your card after it checks your credit report and discovers the bankruptcy. Why? Because the credit card company cannot force you to pay for your purchases if there is no official agreement.
Your Business Credit Card Under Chapter 7 Bankruptcy
If your company gives you a credit card to cover supplies or travel costs, you are probably either an obligor or an authorized user on the account. The difference matters because it will decide whether or not your bankruptcy filing needs to disclose the account. This is what to look for.
Users of Approved Credit Cards Who File for Chapter 7
Charges related to business can often be sent directly to the company if you are an authorized user. You will not include the account in your bankruptcy because it is not in your name. Furthermore, you should be allowed to keep using the card.
Bankruptcy Filings by Credit Card Debtors
In the case that you have a duty on the account, you and your boss are likely to have to share the outstanding amount. You should settle the credit card bill and then ask your company for reimbursement.
When you file for Chapter 7 bankruptcy, the credit card account still has a balance. If that is the case, the credit card provider will probably shut the account, and you will have to include it in your bankruptcy paperwork.
Why a Credit Card Will Be Provided to You After Chapter 7 Bankruptcy
You can get a credit card after filing for bankruptcy, even sooner than you might believe, even though you lose all of your cards during the entire process. After filing for Chapter 7, you can begin the procedure of restoring your credit.
Within months of earning their Chapter 7 release, many people get new credit card proposals in the mail. Although this might come as a surprise at first, it will become obvious when you realize why credit card issuers view you as an achievable risk. This is the reason why:
- After filing for bankruptcy, most people manage credit carefully so as not to put themselves in a similar situation (and generally avoid using credit for impulsive purchases).
- If needed, the credit card company has plenty of time to begin collection actions against you because they are conscious that you cannot file for Chapter 7 bankruptcy for an additional eight years.
