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.
credit report and collection accounts: "Double jeopardy" or "double entry reporting"
What happens when an original creditor and collection agency both report the same debt on your credit report?
Although there is no technical term, when an original creditor and collector both report you to the credit bureaus for the same debt, this usually referred to as double entry credit reporting, double jeopardy reporting, or double entries on your credit report. Sometimes, there can even be multiple collection accounts for the same debt.
Original creditors and collection agencies are generally permitted to report separate tradelines so long as the reporting is accurate and complete. Sometimes collection agencies will adjust the balance or the date of the delinquency to make this look like a new debt. This can happen when consumers have recently filed bankruptcy and an unscrupulous creditor continues collection efforts after bankruptcy. Learn what you can do when a collector attempts to collect a debt that was discharged in bankruptcy.
You should review your credit report to ensure that old collection accounts do not show up as active or with incorrect balances, or pay status information. Inaccurate collection accounts can harm your credit by making it appear like you have more debt or collection accounts than you actually have. When a collection agency sells, transfers, or no longer services the account, the collection agency should delete the tradeline or update the tradeline by stating it is closed or has been transferred.
You have the right to dispute credit report errors with the credit reporting agencies and other credit bureaus. If the credit bureaus refuse to correct credit report errors, the FCRA permits you to file a lawsuit against the credit bureaus.
You should speak to an experienced credit lawyer if you believe your credit report contains errors, or has double entries that are inaccurate or misleading. Our Michigan credit lawyers can help you dispute credit report errors. Please contact us by filling out our contact form or by calling our office at (313) 415-5559.
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.
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.
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.
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.
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.