If a credit card company were would to go bankrupt, would people still need to pay back their debts with them?

Question

Just wondering...

This is hypothetical, this hasn't happened. Just something my friend and I had pondered earlier...

Answer 1

of course! They would liquidate their debts by selling them to another finance company. You'll see Banks that lend to mortgagors, when they go bankrupt they just assign all of those properties to the person who pays them out. Most of the time they don't actually file bankruptcy they just assign all of their assets to another company and "CASH OUT".and those debtors will have to pay the new company.

Answer 2

From what I can see, there is no such thing as a credit card company even coming close to bankruptcy. It is basically an all-win, no lose business. Besides, they are probably insured to the hills so an insurance company would take the fall.
If they would go bankrupt, you would probably still be liable to pay your debts. Only the company is bankruptcy is not liable to pay their debts (eg. to an insurance company or plastics company for the cards).

Answer 3

Yes. The debt would still be a just debt. Most credit card companies are banks vs. credit unions or finance companies. Hence - what ever entity was their regulator would be the one that received the payments of the debts. The regulators might be - FRB (Federal Reserve Board), OCC (Office of Currency Comptroller) ... etc.

Answer 4

of course!

Have you ever seen a financial company in bankruptcy?

They pay 0.25 % for your savings account. And you pay 15 % and more for your credit card debts.

That's business at it's best.

Answer 5

Next Card Visa went out of business, so to that other person, it does happen.... and to the other, you are correct.... they sold all the accounts to another lender and now people have to repay them.

Answer 6

Of course.

You borrowed the money.

Pay it back.