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Can I keep some of my credit cards?
Applicable only in Chapter 7 cases, some credit card companies will allow you to keep allow your card with a lowered credit limit if you repay some of your debt. In fact, some companies will automatically send you or your attorney a proposed reaffirmation agreement while your case is pending. These agreements are generally a bad idea because they require you to promise to pay some amount of your debt (which is destined to be discharged if you do nothing) in exchange for a minimal amount of new credit. After your discharge, you are paradoxically going to look like a better credit risk than you do before bankruptcy. This is because you won’t have any debts. On the other hand, you will probably have to agree to pay a much higher than normal interest rate on new credit cards. If you always pay your credit card balance in full every month, you will never incur a finance charge, and the high interest rate won’t hurt you.
(Reviewed 11.14.08)
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