How Accounts in Bankruptcy Protection are Reported in Credit Scores Espanol » Written by: John Ulzheimer Filing for bankruptcy protection is one of the most difficult decisions one would ever have to make. Bankruptcy is like waving the white flag and giving up on your obligations. As you can imagine, filing for bankruptcy protection can have an extremely negative impact on your credit reports and credit scores, which will not go away any time soon as bankruptcy filings remain on file for 10 years. People who have filed bankruptcy should not be under the assumption that their credit reports will accurately reflect the then current status of their debts. Errors can and will occur; and may suggest that you still owe discharged debts. Here are some simple steps for making sure your credit reports are as accurate as possible after gaining bankruptcy protection: Check For Errors Many years ago the credit reporting agencies were notorious for incorrectly reporting information about debts that were included in bankruptcy protection. However, thanks to one huge class action lawsuit the credit reporting agencies have gotten much better about accurately reporting debts that are no longer owed because of bankruptcies. Still, errors can occur: Chapter 7 — Consumers who have filed a Chapter 7 bankruptcy should check their three credit reports for errors about three months after their filing date. Chapter 13 — Consumers who have filed a Chapter 13 bankruptcy should check their three credit reports for errors about three months after their filing date AND when the bankruptcy is ultimately discharged, which is typically 3-5 years after the date filed. How Bankruptcy Protection Debts Reported All eligible debts (formally “statutorily dischargeable”) incurred before the bankruptcy filing date should be updated to reflect the fact that it is now included in a bankruptcy filing. This is accomplished by adding the language “included in bankruptcy” to the account information on all three of your credit reports at Equifax, Trans Union, and Experian. There should be a $0 balance reported for any account which was included in a filed Chapter 7 bankruptcy protection or a discharged Chapter 13 bankruptcy, and no past due amounts or late payments that post date the filing. Balances and late payments suggest that you still owe the debt and that the creditor is actively pursuing collection of the debt, neither of which is legal in most cases. Post-Bankruptcy Credit Reporting Errors Although the volume of credit reporting errors on discharged debts have decreased, you still want to ensure 100% accuracy. If you believe that a debt which was included in bankruptcy is being reported inaccurately then you have the right under the Fair Credit Reporting Act to dispute the error and get it corrected. You can include a copy of your schedule of creditors to the credit bureaus to assist in their investigation efforts. Keep in mind, finally, that there are certain debt types that are not discharged in bankruptcy protection, including unpaid tax liens and student loans. If these items continue to reflect a balance on your credit reports after the bankruptcy protection then it’s likely not an error. We want you to know that you are not alone. We can help you correct the errors on your credit report whether you have gone bankrupt or not. Contact us lmfcredit or call us for a free consultation at: (844)WE-FIX-CREDIT (933-4927)
Posted on: Mon, 10 Nov 2014 22:45:45 +0000
Trending Topics
Recently Viewed Topics
© 2015