When an individual declares bankruptcy, there may be some assets that they want to be able to keep in their ownership. A bankruptcy will nullify all loans that are included, but any assets that were purchased with these loans are subject to repossession. Keep and pay is a simple tactic that allows the filer to retain ownership of the asset. By not formally affirming the debt on the court documents, the filer is able to keep the item and make payments as scheduled.
Click for the full glossary of credit card terms.