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Change Banks

Bills.com Team
UpdatedOct 22, 2010
Key Takeaways:
  • A creditor may decline to do business with a debtor after bankruptcy.
  • Consider moving your accounts to a credit union.
  • Write a letter to Chase's president about Chase denying your credit card application.

Chase denied my credit card application due to a bankruptcy I had 10 years ago. Should I change banks?

Due to a business failure, I had to file bankruptcy more than 10 years ago. I owed a balance on my Chase credit cards, which was discharged. My credit scores average above 800 today. I applied for a credit card recently and was denied by Chase. I think they made a bad decision because I have more than $100,000 in Chase over various checking accounts. Should I change banks?

A credit card issuer can do business with whomever it chooses. If you had Chase credit card debt discharged in bankruptcy, the company may decline to do business with you again. Nothing in the bankruptcy code requires creditors to transact business with debtors after a bankruptcy discharge.

The question becomes, what do you do about Chase's snub?

Your first option is to apply for a credit card at another bank. The bankruptcy is long removed from your credit report, and with your lofty credit score and adequate income you can be sure a dozen credit card issuers would welcome you with open arms.

Your second option is to tally the amount of fees you paid to Chase each year for the last 10 years, and make a list of your accounts and their balances, and send a letter to the president of the banking division of Chase and explain you are sorry about the bankruptcy and the account they had to write-off their books, but that you have been a loyal customer and would not it be a shame for you to take your business elsewhere because of the rejected credit card application, which you enclose. If Chase is smart it will issue you a card.

Your third option is to take your business elsewhere. I recommend a credit union. After you transfer the balances from your accounts, send a letter to the president of Chase's banking and credit card business units along with the tally of your accounts and fees that I mentioned above. Explain you have no hard feelings, had wonderful service from Chase's employees, regret the bankruptcy 10 years ago, and if Chase does not want your business you are taking your money to where it is welcomed.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

4 Comments

LLinda, May, 2011
Or you could pay the old charged-off balance.They can't ask for it. You filed bankruptcy, so you can never be asked to pay that debt again. You legally do not owe it. But the fact is, you took money from them and didn't pay them back. I bet they still have a record of exactly how much it was. So, since you have thousands upon thousands of dollars now, why not see if you can volunteer to pay back that old debt? Just because you don't legally owe it anymore doesn't mean you couldn't volunteer to pay it.Of course, you'd probably make the poor bank workers faint if you offered such a thing. But if you talked to whoever they have that handles bankruptcy cases, bet they have a way to allow you to willingly pay back debt that had been included in the bankruptcy and "forgiven".And while they will never be allowed to say out loud that such was the reason, afterwards, I'll bet you'd find yourself getting approved for the loans you want.
TTodd, Jun, 2011
Pay them back?That is ridiculous!If Banks take a chance on somebody and lose, oh well, that is the same as investing in the stock market.Investors take a chance on a company and they fail, they lose, what is the difference??? I am not suggesting people who commit fraud are ok. But sometimes people(just like business's) fail.
RRuss, Jul, 2011
Pay them back!!! Chase is still coming after me for discharged dedt!! I was discharged through them for about $15000; now they want it back, even after a discharge?? What gives, we don't owe them anything!
BBill, Jul, 2011
If by discharged you mean the debt was included in a successful bankruptcy filing, then a creditor that attempts to collect on a discharged and not reaffirmed debt is violating federal bankruptcy law. Consult with a bankruptcy lawyer.

If by discharge you mean charge-off or write-off, then the creditor has not forfeited the right to collect the debt. Click on the hyperlink I just mentioned to learn more.