Will they close my credit cards and store accounts if I file bankruptcy?

Probably yes.  The only exception is for credit unions.

On the day we file bankruptcy, 99% of your creditors will close your store accounts and shut off your lines of credit.  This happens even if your store card is in good standing.  For example, let’s say that you have a Gap Card with a zero balance.  On the day we file bankruptcy, they will close that card, even though they suffered no loss as a result of the bankruptcy.

Even if you pay the account down to a negative balance (you overpay your bill so that there is a credit on the card), they will still close the account and then send you a check for the overpayment.

Sometimes my clients will think that if they don’t list a card on their bankruptcy that they will be able to keep it.  No.  That account will still end up closing, even if it wasn’t listed in the bankruptcy.

Now there are some exceptions:

1.  RC Willey and John Paras… They will always allow you to reaffirm (sign an agreement that you will remain liable for any secured debt you have with them) your current balance for financed furniture.

2.  Most credit unions … Most credit unions will send you a reaffirmation agreement to reaffirm any lines of credit you have through those organizations.

3.  Best Buy, Zales, Kay Jewelers, and Snap On… they may or may not send a reaffirmation agreement, but it seems to be random when they actually contact us.

So, it is safest to plan on having all credit accounts shut off whether or not you list them in your bankruptcy.

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