How to read your credit report and understand your credit report is essential to performing a credit check. The national consumer reporting agencies Equifax, Experian, and TransUnion maintain your personal credit information and are commonly referred to as the credit bureaus.

Credit reports contain personal information such as names, date of birth, addresses, public records, and financial information, including past or existing credit card accounts or loans.  Checking your personal information is important to ensure that your credit report does not contain information belonging to someone else.  If you see an address you do not recognize on your credit report, this could signal potential identity theft.

Public records on your credit report typically include things such as bankruptcy, and in the past, civil judgments.

Each individual account or tradeline appearing on your credit report typically includes the following categories of information reported by furnishers of this information such as creditors or collectors to the credit bureaus:

• Name of Creditor:  the name of the bank, lender or credit card company. 
• Account Number: the unique account number associated with your account or loan.
• Account or Loan Type: these include (1) "installment" accounts such as automobile loans, mortgage loans, and student loans, (2) "revolving" accounts such credit cards or home equity lines of credit, and (3) "open" accounts such as a utility bill or cellular telephone bill. 
• Account Balance:  the current amount owed.
• Past Due:  whether there is a past due amount.
• High Balance: the highest reported balance on the account.
• Account Status:  this can indicate whether the account is open, current, past due, charged-off, in collections, settled for less than the full balance, or included in or discharged in bankruptcy. 
• Date Updated: the date the account information was updated by the furnisher.
• Date Opened: the date the account was opened.
• Responsibility: this indicates whether you are individually responsible for the account or whether there is a joint accountholder.
• Payment History:  this will indicate whether past payments have been made on time or late.  Most late payments reported on credit reports will report the days past due, such as 30, 60, 90, 120, and beyond.  Alternatively, late payments can be reported by codes such as 1, 2, 3, 4, and beyond denoting a certain length of time (for example 1 can mean 30 days late).
• Remarks:  like the Account Status, this can indicate whether the account is open, current, past due, charged-off, in collections, or included in or discharged in bankruptcy. 

​Collection Accounts on your credit report will typically report similar information, and  include the following additional information:

•  Original Creditor:  the name of the original bank, creditor, or lender.
• Original Balance:  the balance prior to collections.
  

If your credit card balances are too high and you are unable to pay your credit card bill, there can be many consequences, including collections and a potential lawsuit against you to recover the outstanding balance.

Most consumers receive a large number of collection calls when they miss a credit card payment. Collection calls can last for months and there can be multiple collection calls times per day. 

Many consumers receive collection calls from creditors such as credit card companies or collection calls from debt collectors.  Excessive collection calls can interfere with your peace of mind, and  abusive or harassing debt collection practices by unscrupulous debt collectors can lead you to believe the collector might take action the collector does not intend to take or not authorized by law.

If you are receiving unwanted collection calls, you have the right to instruct the collector not to call you anymore.  Most consumers who miss a credit a card payment or default on credit card payments will receive a large number of collection calls, usually to their mobile telephone.  There are several collection laws that protect consumer rights and permit you to instruct the collector not to call you anymore, including the Telephone Consumer Protection Act and Fair Debt Collection Practices Act.

If you have recently defaulted on credit card obligations, speak to a knowledgeable consumer attorney who can help you protect your rights and deal with credit issues.  Our consumer attorneys help individuals in Arizona and Michigan and can help you stop collection calls.  There are consumer protection statutes like the FDCPA and TCPA which allow you to sue the collector for violating collection laws.  You may also be a candidate for debt settlement or bankruptcy. Please contact our office at (313) 415-5559 or use our contact form to schedule a free telephone consultation.

 

​If you are sued and a creditor gets a judgment against you, you may be able to discharge your personal liability for that judgment in a Chapter 7 bankruptcy, and your credit report should list the judgment as included in bankruptcy or discharged in bankruptcy.

This will depend on whether the underlying debt on that judgment is dischargeable in bankruptcy or nondischargeable.

​Nondischargeable Debts:
Certain debts are usually not automatically nondischargeable, such as student loans, child support or spousal support obligations, debts owed to government entities (fines, taxes, court costs, restitution in criminal cases, etc., post-petition HOA and condo fees, and, death or injury caused by driving under the influence, or DUI.
 
Other types of judgment debts may not be dischargeable if the creditor objects to a discharge, including, injury caused by a willful or malicious act, such as assault, fraud used to obtain money, goods or services, or fraud committed while in a position of trust, such as embezzlement while acting as a trustee or guardian.

Judgment Liens:
Even if you are able to discharge your personal liability on the judgment, there may be a lien that survives the bankruptcy. Under certain circumstances, you may be able to avoid a judgment lien in the bankruptcy, depending on available bankruptcy exemptions.  You should speak to a knowledgeable bankruptcy attorney about whether you can avoid a judgment lien in bankruptcy.
 
Dischargeable Judgments:
If a creditor sues you and gets a judgment for debts, including a judgment for credit card debt, medical bills, lease or rental agreements, and the debt is later discharged in bankruptcy, you should check your credit report to ensure that the judgment is updated after the bankruptcy. 
 
Judgments can remain on your credit report for up to 7 years from the filing date.  Your credit report should accurately report public record information, including judgments.
 
After filing bankruptcy, a judgment on a discharged debt should be reported as included in bankruptcy or discharged in bankruptcy.  You should check your credit report to ensure that the credit bureaus do not incorrectly report the status of the judgment, or report a current balance for discharged debt.  
 
If you believe your credit report contains errors, or incorrectly reports debts or judgments that were discharged in bankruptcy, contact one of our attorneys today at (313) 415-5559 for a free consultation.

Whether to file bankruptcy can depend on many different things.  For some, bankruptcy can be a first and only option, or a last resort.  

Who is a good candidate for bankruptcy?  
If you are considering filing bankruptcy, you probably have too much debt to repay.  Chapter 7 bankruptcy allows you to liquidate or eliminate this debt without having to repay discharged debt.  Chapter 13 bankruptcy allows you to repay some portion of the debt you owe for a 3-5 years.   

Chapter 7 candidates typically have minimal assets, modest to low income, and high credit card or other consumer debt.  In fact, when we speak to potential bankruptcy clients, our main points of inquiry are:  income, assets, and type of debt.  

• Assets:  bankruptcy allows you to keep your property up to certain limits known as bankruptcy exemptions.  Sometimes these exemptions can protect all of your property during bankruptcy.  Filing chapter 7 bankruptcy puts your assets at risk if the value of these assets exceeds the applicable state or federal exemption for the asset category (e.g., homestead exemption, motor vehicle exemption, clothing exemption, etc.).   Some states allow debtors to choose between federal and state bankruptcy exemptions.  State bankruptcy exemptions vary and you should speak to a local bankruptcy attorney about these limits.  Federal bankruptcy exemptions include the homestead exemption ($23,675), and the motor vehicle exemption ($3,775).
• Income:  your income must fall below the applicable median income for your county of residence and household size.   For example, the median income for a family of 4 in Michigan is approximately $82,000. If your income exceeds the applicable median income, you will be required to take the bankruptcy "means test" to determine whether your disposable income is sufficient to repay some portion of your debt.  
• Type of Debt:  bankruptcy can eliminate certain types of debts including, credit card debt, medical or hospital bills, mortgage debt, and/or automobile debt.  However, filing chapter 7 bankruptcy does not mean you get to keep your home or automobile if there are valid outstanding liens on this property.  Bankruptcy can eliminate your personal liability to repay this debt, but the lien will survive.  Thus, you will be required to keep making your regular monthly payments if you wish to retain certain property.   Filing bankruptcy allows you to "redeem" certain property such as your automobile.  In a nutshell, this means you can pay the creditor the current fair market value of the vehicle instead of the current balance (which may be significantly higher than the current value).

Who is not a good candidate for bankruptcy?

• Individuals who do not meet the above criteria can consider chapter 13 bankruptcy or debt settlement.  
• Filing chapter 13 bankruptcy can allow you to retain property beyond the applicable bankruptcy exemptions, but you will be required to make monthly payments to the bankruptcy trustee for 3-5 years. 
• Debt settlement can be an attractive option if you have relatively high assets or income, or a low amount of debt (>$10,000 or below).   Debt settlements are agreements to pay less than the full balance owed.   Individual debt settlements can vary, but are typically between 20-50% of the balance owed.

Is bankruptcy a last resort?
Depends.  Some people can avoid filing bankruptcy by agreeing to debt settlements with their creditors or by pursing creditors and debt collectors who violate the Fair Debt Collection Practices Act (FDCPA) or the Telephone Consumer Protection Act (TCPA).   The key is to plan as early as possible.  This means before you default on credit card debt or shortly after defaulting on credit card debt.  You need to know your rights before dealing with abusive debt collectors.

Debt collection harassment is a serious issue.  If you are receiving unwanted collection calls, or if debt collectors are sending you abusive harassing, or threatening collections letters, you may be entitled to damages against abusive creditors or debt collectors.  Some individuals have eliminated thousands of dollars in debt and recovered thousands more against creditors and debt collectors who violate federal consumer protection laws.  You should speak to a knowledgeable consumer protection lawyer to learn about your rights under the Fair Debt Collection Practices Act and the Telephone Consumer Protection Act.  

Our Michigan bankruptcy and consumer lawyers are happy to answer any questions you have.  Please contact us at (313) 415-5559.  We have offices conveniently located in Southfield, Michigan and Dearborn, Michigan.