What happens if a company files for bankruptcy and you have a credit card with them?
Isabella Turner
Updated on January 20, 2026
If you carry a balance on the card You will still be responsible for paying off your balance, even if a retailer files for bankruptcy. If a store goes under, the balance you owe is still due to the finance company that manages your card.
Is credit card debt exempt from bankruptcy?
With a few exceptions, your credit card debt will be discharged in bankruptcy. Many people file for bankruptcy because they’ve racked up excessive credit card debt, often using the credit to pay for necessities, like car repairs or medical bills.
Can I file bankruptcy on just credit cards?
Chapter 7 bankruptcy erases most unsecured debts, that is, debts without collateral, like medical bills, credit card debt and personal loans. However, some forms of debt, such as back taxes, court judgments, alimony and child support, and student loans generally aren’t eligible.
What happens to your credit card when you file bankruptcy?
If you use your credit card to purchase expensive luxury items shortly before filing for bankruptcy, you can expect the credit card company to contest the discharge of the debt in bankruptcy court.
When to file for Chapter 7 credit card bankruptcy?
Chapter 7bankruptcy ensures that almost all credit card debt gets erased. This is the best option to file for if you absolutely think you cannot pay off your debt in a timely manner, or if you owe more money than you can reasonably afford to repay.
Why is credit card debt not dischargeable in Chapter 7?
Two reasons why credit card debt may not be dischargeable are: If you use your credit cards to charge $675 or more in “luxury” goods or services within 90 days of filing your Chapter 7 petition, the court may find that the credit card debt is non-dischargeable.
What happens when you rack up credit card debt?
But if you rack up credit card debt with fraudulent intent, it most likely won’t be discharged in bankruptcy. Charging your card when you know you’ll be filing for bankruptcy is almost always considered to be fraud.
