Chapter 7 bankruptcy is best known for offering forgiveness for credit card debts and other types of unsecured debts, and this is one of the top reasons many people turn to it when they need help with their debt loads. If you are considering this, you might want to know if you can keep any of your credit cards if you file, and here are a few things you should understand about the way Chapter 7 affects your credit cards.
The court will close all your accounts
In Chapter 7 bankruptcy, you can receive forgiveness, also called a discharge, for credit card debts. When this takes place, though, you will not have the ability to keep your credit cards. When you file for bankruptcy, you will have to list every creditor you have, and this even includes creditors with zero balances. If you have an account open with a creditor, it must be listed. The court will then notify every creditor of your bankruptcy case, and the creditors will be required to close the accounts. When the accounts are closed, your credit cards will no longer work. The bankruptcy court will verify all your creditors, too, by examining your credit report. If you failed to list any of them, the court will add them.
You might be required to take a credit counseling course
Before you file for bankruptcy and after you file, you may be required to take a course in credit counseling. This will vary from state to state. The goal of this requirement is to help people learn better ways to manage their money, and this is to help people avoid falling into debt again. Because of this, you will learn how to avoid relying on credit cards to pay your bills. You will learn the benefits of setting up a budget and following it. By taking these courses, you may no longer need to use credit cards like you once did.
The good news is that once you begin living without credit cards, you might not miss them. It is also important to know that in the future you can qualify for new credit cards, if you ever decide you would like to have any again.
If you currently have open credit card accounts, you can expect them to be closed if you file for bankruptcy, but this is not a bad thing. To learn more about credit cards and bankruptcy, contact a professional for bankruptcy attorney services.