Do I have to surrender credit cards at my bankruptcy 341 hearing?

Learn about filing for bankruptcy on credit cards, keeping credit cards after bankruptcy, and applying for a credit card when the bankruptcy ends.

Updated by , Attorney · University of the Pacific McGeorge School of Law

It's common to want to know whether you can keep your credit cards in bankruptcy. Generally, trustees don't have legal authority to force you to relinquish your credit cards, but depending on where you live, certain bankruptcy courts or trustees might ask you to turn them over.

However, even if you can keep the physical credit card, having the card itself won't ensure you retain a credit account. Most creditors learn of your bankruptcy after receiving a bankruptcy notice or pulling your credit report and, as a result, close the account. Read on to learn more about credit cards and bankruptcy.

Filing Bankruptcy for Credit Cards

One of the most common reasons to file for Chapter 7 or Chapter 13 is to eliminate credit card debt. In Chapter 7, filers can erase or "discharge" all credit card debt.

In Chapter 13, you'll likely pay off some portion of your credit card balance. But it might not be much. The amount will depend on whether you have income remaining after paying other higher-priority obligations through the Chapter 13 plan.

Do You Have to Include All Credit Cards in Chapters 7 and 13 Bankruptcy?

When you file for bankruptcy, you must include all creditors in your bankruptcy papers. However, if you don't have a balance on a credit card, it is technically not a debt.

Will the Creditor Cancel My Credit Card When I File for Bankruptcy?

When a credit card company receives notice of your bankruptcy, it will most likely cancel your card. After your case is filed, the bankruptcy court sends out a notice of your bankruptcy filing to all creditors listed in your schedules.

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. So even if you don't list a credit card company in your bankruptcy, the company will most likely find out about it.

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, the one meeting all bankruptcy filers must attend. However, depending on the procedures in your jurisdiction, certain trustees might ask that you turn them over.

Most debtors don't mind giving up their credit cards, especially since credit card companies typically cancel them upon receiving bankruptcy notice. However, no specific legal authority allows the bankruptcy court or trustee to force you to surrender your credit cards.

You can oppose the trustee's request if you want to keep certain credit cards, such as your nondelinquent zero balance cards. Generally, the trustee will not force the issue if you have a good reason for wanting to keep your cards.

Can You Keep Credit Cards After Bankruptcy?

In most cases, no, as explained above. You'll likely need to rely on a debit card until you qualify for a credit card after bankruptcy. This will be true even if you rely on a credit card for work travel because no special exemption exists. However, your bankruptcy won't affect a credit card issued by your employer as long as it isn't tied to your credit report.

How Soon Can You Get Credit Cards After Bankruptcy?

Most people receive credit offers shortly after their Chapter 7 bankruptcy case ends and often even quicker after Chapter 13. Although this might seem surprising, creditors know you can't discharge debts in bankruptcy again for many years, giving them plenty of time to collect through measures like wage garnishments and bank account levies.

Find out when you can file for bankruptcy again.

Need More Bankruptcy Help?

Did you know Nolo has made the law accessible for over fifty years? It's true, and we want to ensure you find what you need. Below, you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!

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Helpful Bankruptcy Sites

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We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.

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