Many people filing for bankruptcy think that they can keep a particular credit card out of the bankruptcy filing as long as there is no balance on it. Technically, the credit card company is not a creditor if there is no balance on it so from that standpoint they are correct. Where the problem lies is the bankruptcy code requires the individual filing bankruptcy to include all their creditors no matter what. This even means your mom and dad or friends if you owe them money.
Where the problem begins is when the person fails to tell their bankruptcy attorney about this phantom account. They think if they don’t tell nobody will know. What they don’t know is creditors randomly check credit reports on their customers and when the big scarlet B. pops up on the credit report, the account will be immediately closed. So much for keeping an account open on the side. Where it gets ugly is when the bankruptcy attorney finds out their client has been dishonest with them. On top of that if the bankruptcy trustee gets wind of it the debtor will hear about it at the 341 meeting or meeting of creditors. This will make the bankruptcy trustee dig a little deeper and review the bankruptcy petition with a fine tooth comb. It makes sense that they would because the individual has already been dishonest with the court, what else are they hiding?
It’s best to be completely honest with the bankruptcy attorney and let them make the decision of how to proceed. Isn’t this what you are paying them for? Allowing the bankruptcy attorney to do their job will save a lot of heartache in the long run. Not only will they be able to protect the maximum on the property using bankruptcy exemption laws, but they will also be able to field calls from aggressive creditors that won’t take no for an answer. People need to understand that it’s not the end of the world to not have a credit card. Many individuals post bankruptcy filing find themselves enjoying the freedom of not having credit. Credit is like an addiction and until you are forced to live without it can you never be cured. Credit will come back quicker than most people know. Everyone needs to understand that creditors are opportunists and they know that most individuals after leaving a bankruptcy filing are either debt free or close to it. These unscrupulous creditors will entice someone with credit but add a high cost.
Initially, most of the offers have high interest rates and fees. This is the time that anyone leaving a bankruptcy filing should be wary of these offers keeping in mind that it is much better to have their credit come back slowly. In due time credit will return but until then it is best to enjoy the freedom being debt-free and living on cash.