Can you keep a credit card in chapter 13

Can you keep a credit card in chapter 13? 

In this article, we’ll discuss the important topic of: “Can you keep a credit card in chapter 13?”

The decision to file for bankruptcy must have put you through mixed emotions, and it’s understandable. Filing for chapter 13 bankruptcy comes with a few downsides, and we understand that the decision to go for it must have been challenging but reasonably necessary for the compelling circumstance you are in. 

In most cases, we are not supposed to keep credit cards with us. However, it depends if your credit card holds a certain amount of money that the credit card company has a claim towards. The most important thing to keep in mind, while you are going to file for Chapter 13 is, listing all your creditors’ names and account related details. 

Can you keep a credit card in chapter 13?

It’s a common question, debtors going for chapter 13 always had. Ideally, debtors don’t hold any rights to possess a credit card under a circumstance such as this. It might put us in a very questionable state. It’s essential to ensure that your creditors have been listed correctly, it doesn’t matter even if the balance on your credit card was $0. 

As per law, listing creditors is a strict mandate for any debtor, going for chapter 13 bankruptcy proceedings. While we speak of cases wherein, most credit cards are regarded as the creditor, that the law requires us to pay, it’s not the case always.  

In any case, you must keep the law informed about your creditors’ list, which includes your active credit cards, even ones with zero balance. In case you haven’t reported, the credit card company might find out about your bankruptcy filing from a different source and immediately seize your borrowing privileges. 

Providing incorrect details of the creditor might be a cause of hindrance in case you were expecting a discharge.  

What happens to credit cards in chapter 13?

Even as per Law, we can’t count credit cards in the list of our creditors always because a creditor is someone, you owe money to, as the debtor, and there are times that the balance on your card is $0. 

  • In case of a hefty balance on your credit card, you are answerable to the credit card company as they are your creditor in this case, and they have a claim on this balance. 
  • In case of no balance on your credit card, the credit card company does not have a claim since they are not even your creditor.  

Credit card company won’t let you have the credit card

It is probably the case that the credit card company might not allow you to keep the card on account of some guidelines established by the Law.  

  • When you come upon a credit card agreement with the card company, you give them the authority to cancel your account almost any time that there is a violation of policies provided by the lender 
  • This agreement clearly states that the card will close down by default when you go for a bankruptcy filing 

How does the company find out about the bankruptcy?

It doesn’t matter whether you have listed them among your creditors or not; they will find out eventually from their internal sources.  

  • Large companies use electronic information services that allow them to track all bankruptcy filings in the country.  
  • Later the company checks whether they have associated accounts with that person, upon which they decide to close down or not.  

Is there a possibility of getting a credit card after bankruptcy?

Once your bankruptcy filing is official and, in the books, companies would know you have to apply for a new credit card; they will keep sending you related notifications. 

  • It isn’t uncommonly hard to get a credit card after bankruptcy; you may keep getting applications for new credit cards in the time that you have filed.  
  • One may even have to use a secured card until the time; their credit score has moderately improved. 

What to do when applying for a new credit card

A new credit card can be quickly issued to you if you present valid proof of your past payment history to the company. 

  • Approach credit card companies and share details about your bankruptcy case honestly. 
  • Reveal all details related to your case and present it to the company, and you can immediately apply for the new credit card.  

FAQs

What happens to credit cards in chapter 13?

Your right to any borrowing privileges is only seized if there’s a significant balance on your card, if the card has a $0 like balance, you might keep it with you because the credit card company is no longer your creditor then.  

Can you keep a credit card in chapter 11?

You must list the credit card’s name and details correctly in the bankruptcy, after looking at your case, the bank will decide if you get to keep it or not.  

Summary

Can you keep a credit card in chapter 13? 

This question has been finally answered for many of you, who was looking out for information to understand whether or not you get to keep the credit cards in chapter 13.  

Discolsure: I am not a financial expert and it is highly recommended that you seek out a professional before making any financial decisions. Articles are informational and for educational purposes only.

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