THE BANKRUPTCY ITSELF
Whether you file Chapter 7 or Chapter 13, it will be listed in the Public Record section of your credit report.  This item can stay on your credit for 10 years from the filing date for Chapter 7.  For a completed Chapter 13 bankruptcy, the public record stays on for 7 years from the filing date.  A dismissed, or unfinished, Chapter 13 can stay on for ten years from the date filed.  Click here for more information on how long things can stay on credit reports.

NOTE: The county recorders offices do not report to the credit bureaus.  The credit bureaus go out and retrieve the public records.

ACCOUNTS INCLUDED IN THE BANKRUPTCY
In Chapter 7, the accounts that were discharged through the BK should have zero balance listed on the credit report.  This is a common error that we see on credit reports after bankruptcy filings. 

NOTE: Accounts in repayment through a Chapter 13 will continue to show a balance as they get paid off over time.

 The Chapter 7 accounts themselves, which are listed as “included in bankruptcy”, can stay on the credit file for seven years from the filing date.  Late payments associated with these accounts will come off 7 years from the date reported.

WHAT TO DO
Check all three credit reports two months after a Chapter 7 discharge.  If you find balances on any of the accounts included in the BK, contact the credit bureaus to request those balances be removed.

Watch for late payments reported after the BK filing date and request removal for any that you find.

Continue to monitor your credit regularly to check for any collection accounts listed for items that were discharged in the BK.

Begin a credit rebuilding plan immediately.  Yes, a bankruptcy filing is very detrimental to credit scores.  However, many people use this fresh start to learn how to use credit responsibly as part of their financial fitness program.

CONTACT US FOR YOUR CREDIT CHECK-UP
We offer a Credit Analysis for only $100 that identifies errors and gives our clients the information and step-by-step details on how to rebuild their credit for their future goals.  Call or email today to get yours.

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One of the big changes is the ability to get a car financed after a recent bankruptcy.   There were always some challenges, including higher interest rates.  However, according to Stephen Snyder, from Life After Bankruptcy, it just got harder.  This is because Ford Credit went from many regional offices in the U.S. to just three nationwide.  According to Mr. Snyder, this eliminates the possibility of building a relationship with a local dealer.  Traditionally, one of the best ways for bankrupt people to get auto loans was to find a finance manager who had a good relationship with their local Ford Credit rep.  Now, the choices just got narrower.    He does say that Ford Credit will take recent bankrupt buyers after the BK discharge with 6 months of good car credit payment history.  He is in the process of updating his book on this subject.

So, if you have had a BK in the past few years, be sure to check your credit reports to determine that all accounts are reporting accurately.  Then, develop a credit building plan to build back your credit rating so that when the required amount of time since BK discharge has passed, you are in a position to have some opetions for your financial and credit goals.  Our Credit Check-Up is only $100 and is a great way to find out what you can do with what you have to build better credit.  Contact us today to get yours.

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If someone files BK in June, it typically takes a few months for the process to be completed and discharged, if it's a Chapter 7; or for the repayment plan to be confirmed, if it's a Chapter 13.

A common error that we see on credit reports is that the creditors, the companies that the consumer has accounts with, report 30, 60 and even 90 day late payments to the credit bureaus after the BK was filed.  Because the BK filing results in an automatic "stay" (stop) of most collection actions against the consumer, the last payment that could be listed on a credit report would be in the month the filing took place.  So the person who filed in June, should have no further late payments  after June listed on accounts included in the BK.

NOTE: In a Chapter 13 repayment plan, late payments made to accounts after the plan is in effect can result in marks on the credit report as well as violations of the BK agreement.

WHAT TO LOOK FOR
A previous article lists steps to take after you file bankruptcy to be sure your credit report is accurate.  This is important to rebuild a positive credit rating as quickly as possible.

The specifics that are talked about in this article are late payments after the BK filing date.

1) Get a no-cost copy of your credit report.  It doesn't matter which bureau it's from.  Follow this link to get the free report you are entitled to annually.

2) Use a colored highlighter to mark ALL late payments, and all accounts listed as "Included in Bankruptcy", and any 'Charge Off' or collection accounts.

3) Have a copy of your official BK papers showing which accounts are included in the BK.  Check the list against the credit report to be sure it matches and no accounts on the credit report were missed.

4) Now check those same accounts to be sure that there are no late payments listed in any month after the BK filing date.  If so, highlight them with a different color to indicate an error that you will dispute with the credit bureaus.

5) Check those same accounts again to confirm that none of them were listed as a Charge Off after the BK filing date.  Remember, this is very common and it adds more negative hits to your credit rating.  Again, highlight with a different color to indicate an error.

6) Look at any accounts on the report listed as a collection.  If they were in the BK, they should have zero balance.  By the way, that goes for ALL accounts listed in a Chapter 7.  Chapter 13 accounts will continue to have balances throughout the repayment plan.

If there is a collection item recently added to the credit file for an account included in the BK, mark it as an error.  You will want to contact that company directly as the first step to get that item corrected on your credit report.

7) Write dispute letters to ALL THREE credit bureaus, even though you only reviewed one report.  Chances are that most accounts are listed on all three and you will then get an updated report from all of them to do another accuracy check. 

Include copies of your discharge paper or repayment plan along with the schedule showing which accounts were included in the BK.  Request that the late payments and/or charge off designations added after the filing date be removed from your file.  You may need to send letters to the companies that are reporting it, too.  Keep copies of everything for your records.

7) Check your reports again in 3-4 months.  Do the same process again to be certain your credit file is accurate.  Then follow a smart, effective Credit Building Plan to regain your credit rating.  Even though the BK will stay on your credit report for up to ten years, most people re-establish their credit within 2-3 years.

You can contact us for information about our services that are specific to those in bankruptcy.  Our clients appreciate the step-by-step plan to start fresh and do their credit rebuilding well.

Having an accurate report as soon as possible will help your credit rating get back on track.  The following are important steps to start getting better credit scores after bankruptcy.

1) Check your credit report.  You can do this at no charge and it won’t count against your score; click here for more information on how to do it.  For Chapter 7 and Chapter 13 BK, check your report 2-3 months after you receive the official discharge notice. 

2) Make sure the status of the BK is listed as “discharged”.  This will be in the Public Records section of your report.  If it is still listed only as “filed’, you can send a copy of your discharge paper to the credit bureaus to address the inaccuracy.

3) All accounts that were included in the Chapter 7 or that were paid off in the Chapter 13 should have a ZERO balance and no past due balance listed.

4) All accounts included in the BK should not have late payments after the filing date.

5) Derogatory information such as late payments, charge-offs and collections, that is reported on individual accounts that were included in the BK, should be removed after 7 years, even though the BK can remain in the Public Record section for up to 10 years.

6) If an account was NOT in the BK but is listed as such on your credit report, you can send a copy of the Schedule from the BK papers showing which accounts were included.  Open and closed accounts in good standing are an important part of rebuilding credit.

It is expected that bankruptcy filings will continue to rise in 2009.  If you are considering this option, be sure to consult a legal expert to understand your rights and which choice will be most beneficial to your financial situation.

We offer a Credit Report Review which can identify inaccuracies that may be hurting your credit scores.  Whether you do it yourself or have an expert review, be sure to check your credit reports after bankruptcy.

Your credit file is created when companies that you do business with report their customers’ account information to the credit bureaus.  They are “subscribers” and pay the bureaus to report each month.  Most major national companies report to all three; however, smaller companies such as collection agencies may not want to pay all three credit bureaus so they only report to one or two.  This is one reason for the differences in your credit files between the three bureaus.

There is no federal law stating that companies must report to the credit bureaus.  Because so many companies DO report, the Fair Credit Reporting Act (FCRA) spells out the length of time different types of information can stay on your report.

1) ACCOUNTS IN GOOD STANDING – 10 Years

Closed accounts that were never late or had any other derogatory information reported can stay on your credit report for up to ten years.  They help your score.

2) LATE PAYMENTS – 7 years

When a monthly payment is overdue by more than 30 days, it will usually shows up on the credit report.  These late payments of 30, 60, and 90+ days can stay on the credit file for seven years from the time they happened.

3) CHARGE OFFS – 7.5 years

When a company lists an account as a “charge off” or “loss to profit and loss” it can stay on your credit for seven years plus six months from the date of the first delinquency that led to the charge off.

4) COLLECTIONS – 7 years

The seven year reporting period starts with the original delinquency with the original creditor, NOT the “date opened” listed by the collection agency on the credit report.  The collection accounts often look newer with more recent dates; therefore it is important to know exactly what the collection item is for and when the original charge occurred.

5) JUDGMENTS – 7 years

The FCRA states that civil judgments can stay on for seven years from the filing date or until the governing statute of limitations has expired, whichever is longer.  Check information for your state here.

6) TAX LIENS – 7 years if paid

Unpaid tax liens can stay on the credit reports indefinitely.  Paid tax liens stay on for seven years from the date of payment.

7) BANKRUPTCY – 10 years

Chapter 7 and 11 bankruptcies can stay on for ten years from the date filed.

NOTE: Accounts included in the bankruptcy stay on for seven years from the date filed.  Late payments listed for those accounts will still come off at their own seven-year mark, even if the account was included in bankruptcy.

Chapter 12 and 13 bankruptcies that are completed and discharged can stay on for seven years from the date filed.   Dismissed, or unfinished, Chapter 12 or 13 cases can stay on the credit file for ten years from the date filed.

WHAT TO DO

If your credit report contains information that is past the reporting period, contact all three of the credit bureaus to get it removed and corrected.  You are well within your consumer rights to do so.  Be sure to follow up, making certain that your report is accurate and that no expired items remain.

Learning about your credit and being proactive in building a positive credit rating is an important step to healthy Financial Fitness for your future.   Contact us today for your in-depth Credit Analysis to be sure your credit report is as accurate as possible.