Can I keep a credit card when filing bankruptcy or a consumer proposal?

A question that is frequently asked during consultations is whether they can keep a credit card when filing bankruptcy or a consumer proposal.  The question usually is about a credit card with a low or nil balance. You may want to keep it for any unforeseen expenses that may arise, as well as for particular instances where credit cards are needed, such as flight or hotel bookings.

 

Upon filing a bankruptcy, you are required to deliver to the Trustee, for cancellation, all credit cards that you have in your possession or have control of, regardless of whether or not there is an amount owing on it.

The only exception that exists is when you have possession and control of a credit card that was issued to a third party such as your employer, spouse or parent. In this case, you must have authorization from the third party or the issuer of the card to continue to possess and use the card.

Alternatively, when filing a consumer proposal, you have an option to keep any credit cards that have a nil balance.  You may choose to give it up anyways to avoid reliance on credit.  The decision is yours in this case.

If you are in need of a credit card after filing, you can apply for a secured credit card through companies such as Home Trust or Capital One.

 

If you have any further questions, do not hesitate to contact one of our Trustees to obtain for more information.

Ashvin Sharma is a Trustee in Bankruptcy who oversees our Brampton offices.  If you are in need of more information, please feel free to reach him at (905) 874-4905 or asharma@spergel.ca.