Q: If a person declares BK, can they include 2 of their credit cards, but keep 1 credit card & their line of credit intact?
I'm asking for a 91 yr-old person who owns nothing (lives in an bare bones minimum apt; no car; no jewelry; owns nothing of value). The person lives on a line-of-credit (LOC) and credit cards. Only income is $915 from SSI. Rent pymt is $1250/mo. My concern is that the bank who provides the LOC might learn of the BK and then stop the LOC or that the remaining credit cards might get cancelled. Should that be a concern?
A: Unfortunately, you cannot pick and choose what creditors to include in a bankruptcy - all debt/creditors must be listed. However, given the situation, why file bankruptcy? Unless someone sues her, they have no ability to access money in bank accounts if she has any. And sounds like she has no assets to be concerned about. Just be sure that mail is being monitored and if she does get served with a lawsuit (personal service is required), then bankruptcy can be considered. I offer a no charge consult which can be done on the phone to give her tips on how to handle creditor calls. In the meantime, I think from what has been disclosed thus far, the bankruptcy would be more disruptive than it would be worth at this time.
Sally J. Elkington agrees with this answer
A: If social security is her only source of income then she does not need to file bankruptcy. Creditors cannot garnish or levy social security benefits. This means she is judgment proof. If she is concerned about creditor calls, then have her change her phone number. If however she decides to file bankruptcy she is required to list all her creditors. In such event, the LOC bank may close the credit line. Much success.
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