In general, you are not required to surrender your credit cards at your bankruptcy 341 hearing (also called the meeting of creditors). Depending on where you live, certain bankruptcy courts or trustees may still ask you to turn them over. However, trustees typically don’t have any specific legal authority to force you to relinquish your credit cards. Read on to learn more about whether you must surrender your credit cards at your bankruptcy 341 hearing.
What Happens to Credit Cards in Bankruptcy?
When you file for bankruptcy, you must include all of your creditors in your bankruptcy papers. After your case is filed, the bankruptcy court sends out a notice of your bankruptcy filing to all creditors listed in your schedules. In most cases, when a credit card company receives notice of your bankruptcy, it will cancel your card. However, under certain circumstances, you may be able to keep a credit card even after bankruptcy (discussed below).
(Learn more about what happens to credit card debt in bankruptcy.)
Do You Have to List All Credit Cards in Your Bankruptcy Papers?
As discussed, you have to disclose all of your debts on your bankruptcy papers. This includes all credit cards with a balance. However, if you don’t have a balance on a credit card, it is technically not a debt. This means that you don’t have to list credit cards with a zero balance.
If a credit card is not listed in your bankruptcy, your lender will not receive notice of your bankruptcy through the court. However, your bankruptcy filing is a public record and the information is reported to credit reporting agencies. This means that even if you don't list a credit card company in your bankruptcy, the company will most likely find out about your bankruptcy.
Do You Have to Surrender Your Credit Cards at the Bankruptcy 341 Hearing?
In most bankruptcy jurisdictions, the trustee will not ask you to surrender your credit cards at the 341 hearing. However, depending on the procedures in your jurisdiction, certain trustees may request that you turn them over. (To learn more about what happens at the 341 hearing, see our Meeting of Creditors topic area.)
Most debtors don’t mind giving up their credit cards (especially since credit card companies typically cancel them upon receiving notice of the bankruptcy). However, keep in mind that there is no specific legal authority that allows the bankruptcy court or trustee to force you to surrender your credit cards. If you want to keep certain credit cards (such as your nondelinquent zero balance cards), you can oppose the trustee’s request. Generally, if you have a good reason for wanting to keep your cards, the trustee will not force the issue.
Can You Keep Your Credit Cards After Bankruptcy?
If you have a zero balance credit card that was not listed in your bankruptcy, the court will not send your lender notice of your bankruptcy. But even if a credit card company was not listed in your bankruptcy, it will typically still learn of it through other sources (such as credit bureaus or other reporting services). In that case, it may still decide to cancel your credit card.
You may also be able to keep a credit card by reaffirming it after your bankruptcy case is filed. By reaffirming, you are signing a new contract with the credit card company that makes you personally liable on the debt again (you essentially lose the benefit of your bankruptcy discharge for that debt). Since most debtors file for bankruptcy to wipe out their credit card debt in the first place, it is normally not a good idea to reaffirm a credit card absent an extremely compelling reason.
Many people can get a new credit card after bankruptcy. Learn more in Getting a Credit Card After Bankruptcy.