credit after bankruptcy
There are many steps you can take to rebuild your credit after bankruptcy. Some of the easiest ways to rebuild credit after bankruptcy include the following:
Checking your credit report after bankruptcy is essential. If your credit report contains errors, this could hurt your credit and lead to the denial of credit or loans. For example, your credit report after chapter 7 bankruptcy should report discharged debts as closed, and without a balance. Sometimes collection agencies will not update your credit report, or will open new collection account tradelines after your bankruptcy even though the underlying debt was discharged in bankruptcy. Don't wait until your denied credit to take action. Check your credit report 60 days after your bankruptcy discharge to ensure there are no errors or mistakes on your credit report.
A secured credit card is similar to a debit card and can help rebuild your credit after bankruptcy. A secured card requires a cash collateral deposit that becomes the "credit line" for that account. For example, if you put $100 in the account, you can charge up to $100.
A co-signed credit card or loan can help rebuild your credit, but you need to have a friend or family member with good credit history who is willing to co-sign for you.
Being an authorized user on someone else's account can also help you rebuild your credit after bankruptcy. Being an authorized user mean that you are allowed to make purchases with someone else's credit account, but are not personally liable for payment of that account. Being an authorized user can appear on your credit report, and can help rebuild your credit if the primary accountholder makes regular payments and keeps the account in good standing.
bankruptcy and your credit report
Why you should check your credit report after filing bankruptcy.
When you file for bankruptcy, the bankruptcy shows up on your credit report as a public record. Filing bankruptcy also affects the individual credit accounts or tradelines in your credit report.
Public Record Reporting
If you file chapter 7 bankruptcy, the bankruptcy can remain on your credit report for 10 years from the date of filing bankruptcy. If you file chapter 13 bankruptcy, the bankruptcy can remain on your credit report for 7 years from the date of filing bankruptcy.
But how should your individual accounts be reported on your credit report after filing bankruptcy?
Chapter 7 Bankruptcy Discharge
After filing chapter 7 bankruptcy, your credit report should list zero balances for discharged debt, and include language to the effect of “discharged in bankruptcy” or “included in bankruptcy.” Your credit report should not list any discharged debt with a balance, or report the account as open or charged-off following your bankruptcy.
Chapter 13 Bankruptcy
After filing chapter 13 bankruptcy, your credit report should accounts should list the balances for each account you are required to pay through the chapter 13 plan while your bankruptcy is pending.
Since a chapter 13 plan can take 3-5 years to complete, your accounts should include language to the effect of “involved in chapter 13 wage earner plan” or “making payments in wage earner plan” while your bankruptcy is pending. Your credit report should not list these accounts as open or charged-off while your bankruptcy is pending.
After receiving a chapter 13 bankruptcy discharge, your credit report should include language to the effect of “discharged in bankruptcy” or “included in bankruptcy” for the accounts that were discharged in bankruptcy. Your credit report should not list any discharged debt with a balance, or report the account as open or charged-off following your bankruptcy.
Our Michigan bankruptcy lawyers and credit lawyers can help answer your questions.
If you have any errors on your credit report, or have questions about filing bankruptcy and the effect on your credit, contact one of our Michigan credit lawyers at (313) 415-5559. We have offices in Southfield, Michigan and our Michigan bankruptcy attorneys can also help you file bankruptcy.
SHOULD I FILE FOR BANKRUPTCY?
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.
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.