When you have no other options for getting out of debt, you might want to turn to Chapter 7 bankruptcy. This branch provides freedom from debt and is relatively fast. If you qualify for it and have a lot of credit card debt, you can acquire a significantly better financial position after using it. As you prepare to file, it might be helpful for you to know these three things about your credit cards.

The Case Closes Your Accounts

When you sit down with a bankruptcy lawyer to file for Chapter 7, the attorney will tell you how bankruptcy affects your credit cards. One such effect is losing the cards. When you file for bankruptcy, most credit card companies and banks will close your accounts. If you have ten credit cards, you will have zero after filing. You typically cannot keep any of your cards. You also should understand that you cannot usually keep a card even if it has a zero balance. The court will issue a report of the bankruptcy to all your creditors whether you owe a balance or not. It does not matter if you are in good standing on your credit card accounts. 

You Should Not Use Them Before Filing

Secondly, when you prepare to use bankruptcy, you should also prepare to stop using the cards. You should stop using them as soon as you decide to file for Chapter 7. The purpose of this is to avoid fraud. The bankruptcy trustee will review your credit card usage for the past few months. If you have new charges, the trustee might question them. Some people believe that they can rack up credit card debt before filing for bankruptcy to get the debts discharged in their cases. This act is considered fraud, and you might end up with legal problems if you attempt to commit fraud in your case.

You Can Get New Cards After You File

Many people find that they may qualify for new credit cards within a few months after completing their Chapter 7 cases. If you want a new credit card, wait until after you receive your discharge and apply then. When you get a new card, aim to use it responsibly to avoid falling into debt again in the future.

If you have questions about credit cards, bankruptcy and how things will affect you, talk to a local bankruptcy attorney today.