Do I have to include credit cards with a zero balance on my bankruptcy petition?

While bankruptcy is designed to help people escape serious debt problems, the situation becomes interesting when it comes to credit accounts with zero balances. These are typically credit card debts, either through credit card companies or those issued by individual businesses. When filing for bankruptcy, debtors only need to include actual debts, so in theory, they do not need to list those zero balance accounts. The situation becomes a little murkier if these accounts include monthly or annual fees, and those fees will become due during the bankruptcy process.

In most instances, you can leave these accounts out of your bankruptcy petition. You should be aware that your petition for bankruptcy does become a matter of public record and that most credit providers regularly data match bankruptcy petition notices and their own records. While your account may have a zero balance, your credit provider is quite within their rights to cancel those cards to prevent you incurring new debt.

Should your credit provider not cancel those accounts, they will be available to use post bankruptcy. This can help to kick start a new positive credit history post bankruptcy so it is well worth considering paying down any credit accounts with low balances prior to filing for bankruptcy. Paying down those accounts will not guarantee they survive the bankruptcy process, however, it can be well worth exploring the option.

Bankruptcy will, especially in a Chapter 7 bankruptcy, discharge all eligible debt no matter how large or small the balance is. Paying down to zero any low value (less than $200) balances makes sense for a number of reasons, most particularly, having that account survive bankruptcy and available post bankruptcy.

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