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Can You File Bankruptcy on Credit Cards? Here’s What It Actually Covers
What You Need to Know: Can You File Bankruptcy on Credit Cards Can you file bankruptcy on credit cards? This
July 1, 2025
Can You File Bankruptcy on Credit Cards? Here’s What It Actually Covers
What You Need to Know: Can You File Bankruptcy on Credit Cards
Can you file bankruptcy on credit cards? This is one of the most frequently asked questions from individuals overwhelmed by mounting balances, late fees, and rising interest rates. The short answer is yes—credit card debt is generally dischargeable in bankruptcy. But the type of bankruptcy you file, how the debt was incurred, and your recent financial activity all play a role.
This article explains how bankruptcy handles credit card debt, what limitations exist, and how to determine if bankruptcy is the right solution for you.
How Bankruptcy Handles Credit Card Debt
Credit card debt is considered unsecured debt, meaning it’s not tied to any physical asset like a house or car. This makes it one of the most common types of debt discharged in bankruptcy filings.
Chapter 7 Bankruptcy and Credit Cards
If you qualify for Chapter 7 bankruptcy, certain qualifying credit card debt may be discharged through the process, subject to court approval and applicable exceptions. Once the court grants a discharge, qualifying balances may no longer be legally enforceable, subject to applicable exceptions.
Key points:
- You must pass the means test to file for Chapter 7
- Qualifying unsecured debt, including credit cards, may be discharged, depending on the circumstances of the case
- The discharge does not apply to debt from fraud or recent luxury purchases
Chapter 13 Bankruptcy and Credit Cards
Chapter 13 works differently. Instead of wiping out debt immediately, you enter into a 3–5 year repayment plan. At the end of the plan, remaining qualifying credit card debt may be eligible for discharge, subject to court approval.
Advantages of Chapter 13:
- May pause certain collection activities and legal actions during the bankruptcy process
- Helps catch up on secured debts like mortgages or car loans
- Allows partial repayment of credit cards based on your budget
Limitations: When Credit Card Debt Might Not Be Discharged
While most credit card balances are dischargeable, there are exceptions, especially if the court determines that the debt was incurred fraudulently or in bad faith.
Common Red Flags That Could Block Discharge:
- Large cash advances taken within 70 days of filing
- Luxury purchases made within 90 days before filing
- Misrepresenting your income on a credit application
- Using a card after deciding to file for bankruptcy
If any of these apply, the credit card company may file an objection, and the court could declare that portion of the debt non-dischargeable.
Other Factors to Consider Before Filing
Will I Lose My Credit Cards After Filing?
Yes. Whether you owe a balance or not, most credit card accounts will be closed automatically once you file for bankruptcy.
Can I Keep a Card for Emergencies?
No. It’s very rare for a credit card issuer to let you keep an open account after filing. After discharge, you can apply for new credit and begin rebuilding.
Will Filing Ruin My Credit Score?
Filing for bankruptcy will impact your credit score, but for many, it’s already been damaged by missed payments.Some filers begin rebuilding credit after discharge, though timelines and outcomes vary based on individual circumstances
Learn More About Bankruptcy and Credit Card Debt
Wondering can you file bankruptcy on credit cards and whether it’s the right move for your financial situation? You’re not alone. Millions of Americans turn to bankruptcy each year to address overwhelming credit card debt and evaluate available legal options.
You may wish to speak with a licensed bankruptcy attorney to discuss whether bankruptcy may be an appropriate option for your situation. You can also review guidance on credit card debt relief to take the next step with confidence.
Taking time to review your options can help you make informed financial decisions.
Frequently Asked Questions (FAQs)
1. Can you file bankruptcy on credit cards and keep your car?
Yes. If your car loan is current and you can continue making payments, you may be able to keep your vehicle, especially under Chapter 13.
2. How long does it take to discharge credit card debt through bankruptcy?
In Chapter 7, about 3 to 6 months. In Chapter 13, it may take 3 to 5 years, depending on your repayment plan.
3. Will I be sued if I stop paying credit cards before filing?
Possibly. Creditors can file lawsuits before you declare bankruptcy. Filing triggers an automatic stay, stopping collection actions.
4. Can I choose which credit cards to include in bankruptcy?
No. You must list all debts and creditors in your filing. Leaving one out intentionally is considered fraud.
5. Is credit card debt always discharged in bankruptcy?
Most of the time, yes. However, fraudulent or recent charges may be excluded by the court.
Key Takeaways
- You can file bankruptcy on credit cards through Chapter 7 or Chapter 13
- Most credit card debt is unsecured and fully dischargeable
- Exceptions apply to recent cash advances or luxury spending
- Filing closes all credit card accounts, but lets you rebuild afterward
- Bankruptcy can provide a legal framework for addressing overwhelming credit card debt, depending on individual eligibility and circumstances
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