Paying off a credit card with a small balance before a bankruptcy filing may be advisable for post-bankruptcy credit building. Debtors must list all of their creditors in their bankruptcy schedules (all debts). The Court then notifies these creditors of the bankruptcy filing. If an individual has a credit card with a balance of less than $600, and is considering a chapter 7 case, he or she may consider paying off the balance before filing for bankruptcy. If there is no balance owed on that credit card at the time of filing, it is not necessary to list it in the bankruptcy schedules, and the card company will not be notified of the bankruptcy by the court. After the bankruptcy is filed, the debtor will usually retain charging privileges. Responsible use of the credit card after a chapter 7 filing should help the debtor to rebuild his or her credit. However, know that it is possible that any credit card company will learn of the bankruptcy through a credit report or some other means, and could terminate charging privileges at that time.
