Do I need to include all my creditors and can I keep my credit cards?

Often people ask me at a first meeting or consult, when we discuss their options, if they need to include all the people they owe money to, including family and friends and also if they can keep a credit card.

The answer is a simple one. You need to include all debts in a proposal or a bankruptcy. Both are formal proceedings that allow you to get a fresh start from all debt so you will want to include all the people you owe money to in order to get that fresh start. There is little point “cherry picking” and being potential stuck with a debt after you have completed the bankruptcy or proposal. Including debts to friends and/or family is difficult, however, it could potentially be more difficult down the road if you have excluded them and there is a falling out between the parties. You do not want to be responsible for the debt after you have completed your bankruptcy or proposal because you deliberately excluded someone.

As for keeping a credit card, I get asked this question most often if people have points they have accumulated on the card and they owe no money on the card at the time of the bankruptcy or proposal. Credit cards, the actual card itself, is the property of the credit card company that issued it to you and it needs to be returned to that credit card company when you file for bankruptcy or a proposal. So unfortunately, even with points and no balance, the card needs to be returned.

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