Credit during Bankruptcy

When you file for bankruptcy  you are not able to keep any existing credit cards.  One of your duties as part of a bankruptcy is that you must either destroy or turn any credit cards that you have over to your Trustee when the bankruptcy is filed.  Those accounts will automatically be closed on your behalf by your creditor.

The only exception to this is if you have a credit card that is in your possession but was issued to a third party (i.e. a spouse, employer etc.) and where you have written permission from the third party to keep the credit card.  If this is the case you must provide a copy of that written permission must be given to your trustee.  In all other circumstances you are not allowed to keep a credit card when filing a bankruptcy.

Looking to apply for credit card during bankruptcy? If you want to apply for a new credit card once you have filed a proposal or a bankruptcy, you can do this.  Ultimately it will be up to the institution you are applying with to determine whether or not you will qualify, but you can apply.  In order to be approved you may have to look first at a secured credit card and you will want to disclose the fact that you are in bankruptcy as part of the application, but it is technically possible.

The major advantage of obtaining a credit card during bankruptcy or at some point during the bankruptcy is that it can assist with re-establishing your credit.  But in order for the credit card to have a positive impact on things make sure you only use the card for items you have planned for in your budget and then pay the card off each month to avoid having to pay interest.