At the time that you file for bankruptcy, you will list your creditors. Once your case begins, the creditors will receive a notice of your bankruptcy. If you do not list a credit card because it has a zero balance, then the creditor will not receive the notice. Some clients choose not to add a credit card but are surprised when the creditor finds out about the bankruptcy. All bankruptcies are public and hence any creditor can find out.
Should you give up all your cards at the 341 hearing?
What to Know About the 341 Hearing
The 341 hearing or Meeting of Creditors is where you and your trustee meet with creditors. At this time, your trustee may ask that you turn over any credit cards that you have. You do not have to give up the cards, however. It would not be illegal for you to hang onto them. However, many of them may be canceled as soon as you filed for bankruptcy. If the trustee asks you to hand over the cards, you can always refuse or argue as to why you should keep one or some of your cards. The trustee cannot force you but he or she may advise you to give up your card. Some exceptions may apply.
What Happens to Your Credit Cards
If you had a creditor who was not notified about your bankruptcy because of your zero balance, then you may still have the card following the bankruptcy. However, you shouldn’t expect this to last very long. The bankruptcy will appear on your credit report and creditors find out about bankruptcy cases quickly. Most often, a lender will cancel your card, whether you wanted it discharged or not.
If you want to keep the card, you can contact the company to find out if you can reaffirm the card. This means that you would sign a new contract. Keep in mind that once you file for bankruptcy, it could be difficult to keep credit cards or to sign up for new cards right away.
When it comes to bankruptcy, the odds of keeping your current credit card is low. In most situations, people want to discharge all of their debt and this includes every card. If you are worried about keeping a credit card or about any issue regarding your bankruptcy, set up a consultation with a bankruptcy lawyer, as soon as possible.