Can I keep a credit card in bankruptcy and not "include it"?

I get this question a lot in bankruptcy practice. Many people think bankruptcy means you can pick and choose what debts to go "bankrupt" on and which you want to keep. This is false.


Filing for bankruptcy means you are declaring you can no longer maintain your debts at a certain period in time. Filing for bankruptcy goes on your credit report as a reportable activity, although this does not mean your credit score is permanently damaged.

When you file for bankruptcy, it is very common for ALL of your open credit lines to be closed by the lenders as a matter of practice, EVEN if that card has a $0 balance.


Please don't try to pay off any credit card debts prior to filing for bankruptcy with the intention of trying to keep a credit card open. It is very possible/likely that ALL credit lines will automatically be closed, even if those cards have a $0 balance when you file. Doing this is not only a waste of money but could also create a potential preferential payment issue.


You cannot pick and choose what debts to "include" in bankruptcy and which debts to "leave out" because filing for bankruptcy is a status, not choosing what you don't want to pay anymore.


Now, this does not mean that your car or house will automatically be taken back as these debts are secured debts and different rules apply. Speak to an attorney today about what options you may have.


Attorney Allison Greenlee Korr handles cases in Kalamazoo, Battle Creek and all surrounding counties, call today for a consultation. 269-381-4471