Frequently Asked Questions
Can I file bankruptcy on credit card debt?
Yes. Credit card debt is general unsecured debt and is fully dischargeable in Chapter 7 bankruptcy. In Chapter 13, it is repaid partially through a court-supervised plan, with the remainder discharged. There is no minimum amount of credit card debt required to file.
Will I lose my house if I file bankruptcy for credit card debt?
No. Credit card debt is unsecured, meaning it is not tied to your home. Your home is protected by the homestead exemption in your state. In Chapter 7, you keep your home if your equity is within the exemption limit. In Chapter 13, you keep all property while repaying debts through the plan.
Can I keep one credit card out of the bankruptcy?
No. You are legally required to list all debts in your bankruptcy petition, including credit cards with zero balances. Omitting a card is grounds for denial of discharge. All credit card issuers will close your accounts once notified of the filing.
What about store credit cards?
Store credit cards (Target, Best Buy, Amazon, etc.) are unsecured credit card debt and are treated identically to regular credit cards in bankruptcy. They are fully dischargeable in Chapter 7.
Can the credit card company object to my discharge?
Yes, but only in limited circumstances. A creditor can file an adversary proceeding under Section 523(a)(2) if they believe charges were made through fraud, or if luxury purchases over $800 were made within 90 days or cash advances over $1,100 within 70 days of filing. In practice, most credit card companies do not object for typical consumer balances.
How soon can I get a credit card after bankruptcy?
You can apply for a secured credit card immediately after discharge. Many people receive approval within 1-3 months. Unsecured cards typically become available 12-18 months after discharge. See rebuilding credit after bankruptcy for the full timeline.
Is debt settlement better than bankruptcy for credit card debt?
Not usually. Debt settlement resolves only 35-60% of enrolled debts, takes 2-4 years, charges 15-25% in fees, and triggers a tax bill on forgiven amounts over $600. Chapter 7 eliminates all credit card debt in 3-4 months, costs less, and the discharge is not taxable. See debtsettlementvsbankruptcy.com for the full comparison.
What if I transferred a balance right before filing?
Balance transfers before bankruptcy can trigger fraud objections under Section 523(a)(2). The new card issuer may argue you had no intent to repay. Wait at least 90 days and make payments. See balance transfer traps.