Can I Keep My Credit Card After Bankruptcy?

Debtors filing bankruptcy often want to keep at least one credit card out of their bankruptcy filing. Their reasoning is that since it is almost impossible to survive in our society without a credit card, keeping one credit card out of bankruptcy would be helpful. However, when a debtor files bankruptcy they are required to include all of their debts in the bankruptcy filing. But they are allowed to “reaffirm” a debt after the bankruptcy filing. When a debtor reaffirms a debt, they are entering into a legally binding agreement that says that that particular debt will be permanently taken out of bankruptcy and that the debtor will repay the debt, adhere to the originals terms of the loan and continue to make payments as agreed. Many debtors reaffirm mortgage debt and car loan debt which are secured loans. They often reaffirm the secured loans in bankruptcy because it allows them to keep the secured property (house or car). However, is it a good idea to reaffirm credit card debt? In most cases it is not a good idea to reaffirm unsecured credit card debt during bankruptcy. Even if a debtor reaffirms credit card debt during bankruptcy, it is not guaranteed that the credit card account will remain open and available for the debtor’s use. A matter of fact, it is highly likely that the credit card account will remain closed and you will be required to repay the debt, plus any additional fees and interest accrued. For debtors filing bankruptcy, the best solution is probably to keep all of your credit card debt in bankruptcy and get a secured credit card after your bankruptcy has been discharged. A secured credit card will allow you to have the convenience of a credit card while rebuilding your credit record.

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