Keeping a Credit Card, Omitting a Creditor

From time to time I’m asked: Can I leave my Visa (or some other credit card) off my bankruptcy?

The short answer is: No it’s not allowed and it wouldn’t do you any good if you did leave a credit card off. You might as well cut them all up.

Many people think that by leaving the credit card off the bankruptcy petition they can keep the account open. They think that by leaving the credit card off of the petition for bankruptcy the debt to the credit card company will not be affected so they can keep on using the card.

First of all, you must list all your debts on your bankruptcy petition. You are not allowed to “pick and choose” which debts you list. The reason is that you are not permitted to discriminate among your creditors. They must all be treated the same (unless they are given priority under the law such as child support, taxes, etc.)

Secondly, if you were to leave a credit card off of your bankruptcy petition that credit card companies would still find out about your bankruptcy because they are monitoring all their customers’ credit. As a general rule, when you file bankruptcy, you can assume all your credit card accounts will be closed by your creditors and it doesn’t matter whether or not you list them in your bankruptcy.

Keep in mind that there is also a rule (in the 9th Circuit – our circuit) that in a “no asset case” (your case will probably be a no asset case) debts that get left off the petition are discharged anyway. See discussion about omitted creditors.

So how do you go about keeping one credit card open after you declare bankruptcy? If you really want to do this you can contact the credit card company and tell them you want to reaffirm. This means you reactivate the discharged debt. They will send you a reaffirmation agreement. I think reaffirmation, in this context, is rarely a good idea. The chances are you’ll be able to get a new credit card after bankruptcy. Why pay a debt you’ve discharged in bankruptcy?

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