Can I Keep One Credit Card Out of My Bankruptcy?

Clients sometimes ask me if they can keep just one credit card out of the bankruptcy?  They want to omit it from the bankruptcy paperwork and keep paying the credit card payments after the bankruptcy filing so they can have one credit line.  Usually, this request is prompted by the fear of not having credit after the bankruptcy filing for emergencies.

Omitting a credit card account from the bankruptcy schedules generally BACKFIRES.  Most of the credit card lenders will FIND OUT out about the bankruptcy, even if the account is not listed, and CANCEL the credit line.  Lenders subscribe to electronic services such as Banko to tell them about all bankruptcies filed every day.

Many credit cards such as JC Penney and Dillards are actually the same creditor and notice to one account at GE Money Bank will result in cancellation of all accounts through that bank.  Often lenders run your name through the credit reporting agencies on a periodic basis.  The lender will FIND OUT, it is just a matter of when.

Once the lender finds out about your bankruptcy, the credit card account will be canceled, any post-bankruptcy payments will be forfeited, your account will be sent to collection for any post-bankruptcy charges and you will have negative post-bankruptcy credit history.

Omitting creditors from your bankruptcy schedules is wrong.  Intentially leaving off creditors in your bankruptcy case is fraud and a federal crime.  The discharge of debts is a reward for honest debtors who make full disclosure of their finances.  In addition to risking prosecution for perjury, you could be denied your discharge.

Can I list the credit card and keep it by reaffirming?  Generally, no.  Most creditors will not agree to a reaffirmation of unsecured debts and most bankruptcy judges will not approve such reaffirmations.  Your attorney is not likely to be willing to sign a required affidavit that reaffirmation of credit card debt is in your best interest.

About Jill Michaux

Jill Michaux is a Kansas bankruptcy attorney. She can be found on Google+. She and her partner, Mark Neis, are Topeka's only board certified consumer bankruptcy law specialists.