Will my credit card be taken away if I file for bankruptcy? 3 Answers as of August 22, 2010I am thinking about bankruptcy but I am scared about what it is going to do to my financial situation afterward. My friend told me that they take away your checking accounts and debit cards after going through the bankruptcy. She also said that they will reject all future applications for a credit card and checking account. Will they take my accounts away from me if I file for bankruptcy?
Law Offices of Michael J. Berger | Michael J. Berger
Most people who file bankruptcy have credit card debt. This debt is typically part of the debt that is discharged in bankruptcy. Credit card companies cancel the credit cards of debtors who list them in their bankruptcy proceedings, if they have not already closed the accounts prior to the filing of the bankruptcy due to delinquent payments. Even credit card companies that are not owed anything by the debtor typically cancel the credit card accounts of their clients that are in bankruptcy. Debit cards are a different story. Debit cards are generally not affected by the filing of a bankruptcy. Checking accounts are usually not affected by the filing of a bankruptcy, except in the case of certain credit unions that will close your checking account if you do not pay back any debt that you have to them. As to future credit applications, your credit score will get worse when you file bankruptcy, but then get better after you receive your discharge. Most of my bankruptcy clients have better credit scores one year after I file bankruptcy for them than before they filed bankruptcy. They apply for credit, and they often get it. For specific advice about your matter, please call me.
Answer Applies to: California