Credit Cards
I had a client in my office today that is going to be filing a Chapter 7 bankruptcy. As she looked over all her creditors she realized there were some credit cards that she wanted to keep out of the bankruptcy so she could continue to use them. Two of the credit cards were gas cards which she paid the balance off at the end of each month. She didn’t want them listed so she could continue to use them when she purchased gas. The Trustee understands the need for a gas card and usually will not object to the use of one as long as the balance is paid off each month.
The other credit card she didn’t want included in her bankruptcy was her Sam’s Card. She claimed that she liked to shop at Sam’s with her daughter (who is old enough to have her own credit card) and put the purchases on her credit card. I explained that since the balance was around $800 she needed to include it in the bankruptcy and not continue to use credit cards. As many clients, she didn’t understand why she would have to include a credit card if she was current on the payments.
The reason you cannot continue to use credit cards in a Chapter 7 is because you must have filed your case in good faith. Trying to discharge credit card debt on one end and racking up credit card debt on the other doesn’t show good faith. One of the questions that many Trustees ask is if you are still using credit cards. The appropriate answer is no.
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