Sunday, March 14, 2010

What happends to your credit card debt if the bank goes bunkrupt?

If I have a credit card debt with a bank or institusion that files bunkrupcy or is for sale (and gets bought) what happends to my debt do I still have to pay the debt and to who ???

What happends to your credit card debt if the bank goes bunkrupt?
The account (if you carry a balance) will be sold as a receivable. However, it will convert to a closed-end loan. Thus, no more using the card. Reason being the first 6 digits on the card are the BIN, Bank Identification Number. Visa/MC's systems will not function properly if one bank is managing cards issued with multiple BIN's. Even worse, the system would melt down if one BIN was used by multiple banks. The entire routing of transaction information to move money needs this one-to-one relationship.
Reply:you pay to the new owners of the account; don't worry, they won't forget about you. you are an asset to them.
Reply:You pay it to the receivers for the bank (You didn't think they would forget billions of dollars did you?)
Reply:Your debt is considered part of the bank's accounts receivables (an asset). Typically someone will either buy the bank's assets as a whole or can purchase just certain pools of receivables. Either way, you would end up owing the money to someone else. Often times, nothing will change on your end in terms of where you keep sending payment, but if it does, you'll receive a letter in the mail with updated payment instructions.


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