Bankruptcy, while not always the first choice for anyone facing financial hardship, has become a more popular option recently as people continue to struggle due to job losses, medical bills and other other obligations. However, there are still lots of questions surrounding the bankruptcy process and what it entails, including whether or not you can keep your credit cards. California residents should educate themselves on the intricacies of bankruptcy and its ramifications.
Credit cards and bankruptcy
When you make the difficult decision to file for bankruptcy protection, you need to report all credit card balances, even those with no outstanding amounts. Your creditors are going to find out about your bankruptcy anyway, so it is easier to simply be upfront about what is out there. Unfortunately, once you receive a bankruptcy discharge, your credit card accounts will be closed.
What about company credit cards?
Depending on your career, you may have a company credit card that you use to cover gas, food and other work-related expenses. You are not obligated to report these accounts in your bankruptcy since you are not the cardholder. If the card is in your name but your employer reimburses you monthly for the expenses, the waters get a little murkier on company cards so you should consult your attorney.
Credit cards after bankruptcy
Finding credit card companies who will give you a card after bankruptcy can be difficult, but it’s not impossible. You will probably need to look into a secured credit card, which is a type of credit card that requires you to have a security deposit that is equal to your credit limit. Once you establish responsible money management, you can negotiate with your creditor about accessing your deposit. An experienced bankruptcy attorney can discuss these and other matters with you.