I'm just about to declare bankruptcy. As part of my preparation, I pulled my CRA's and discovered two department store credit cards that I had forgotten about with $0 balances. After digging through my files, I found the cards and verified that they were still open and I had credit available. When I spoke to two different lawyers about my bankruptcy and mentioned the two cards, I got two very different answers in how to handle them. One lawyer said I had to put down all creditors whether or not I had a balance and the other lawyer said I only needed to list the creditors that I owed money. They also differed in whether the cards with $0 balances would survive the bankruptcy. First one said "no way" and the second one said "positively yes." Also...when I went by my local Target store a couple of days ago, they were really pushing the new Visa card. The clerk tried to encourage me to apply, but I told her my credit was bad (actually it's not...I'm current on all my bills with no late pays--just high debt ratios). She said I should still apply because Target is pretty good about approvals and I would know instantly. Should I apply, hopefully get approved, don't charge anything for 6 months and keep the card for after BK? Thanks in advance!! Cynthia
Your chances of keeping cc after bk are remote. All cc companies sweep their accounts at regular intercvals and typically cancel anyone with a bk even if the balance is zero. If any survive, you just got lucky. It's just not a good idea to apply for credit if you've made the decision to file for bk. The less current info that could be made available to creditors, the better off you'll be.
Cards with 0 balances that have not had activity for the prior 6 months before filing BK do not have to be included. There is a Dollar amount, I think $600 of activity during the prior 6 mths, but not postive that is the threshold of items needing to be included (anything less than that threshold can be left out if balance is 0). Each creditor will most likely get an auto notification once you file. It is each creditor's own decision to close your account or keep open after you file bk. Every creditor has their own policy. Until your bk is discharged by the court, each creditor is at risk of being included in the bk at anytime. That is why some creditors may close your account even if balance was 0. Amex has the strangest policy. Since you need to pay Amex in full each billing period, you never actually owe them if your balance is paid in full. Never the less, they will close your account once they find out you filed. You may go 6 months or longer before they catch it and then one day you will get a call that your account has been closed. Even if you had a perfect payment record with them during your entire history and did not include them in bk.
Direct is right. My chap 7 was discharged in 11/92, and in 10/94, AMEX caught up with me and terminated the account. I had always paid them, and because I had older family members with cards, they always advised me to call AMEX if I was going to be late. It is a no mercy, no exceptions policy. cariba
I filed in March 2001. Just had one of my retail accounts closed by Gottschalks out of California. I also have another retail card that is okay still, but I'm not holding my breath. I was also told by my own attorney, and have read on a lot of bankruptcy sites and a couple of books, that you don't need to list a creditor on your schedules if you do NOT owe a balance on them when you file. It's really up to the creditor, no one can tell you for sure if your's in particular will survive. I have read on other boards where people have had cards that survive, and then some don't. I've also read that people have applied for credit right before they filed and it survived since it didn't have to be included, but it is true that you could still have it slammed shut down the road. Good luck on your filing.
