Life after Bankruptcy
Once a debtor has received a discharge in bankruptcy, those creditors whose debts have been discharged are required to report that the account has a zero balance. However, the fact of the filing itself can remain on the credit report for 10 years from the date it was filed.
A debtor interested in re-establishing credit after having gone through bankruptcy should obtain credit reports from the three largest credit reporting agencies, Experian, Equifax, and Trans Union, and ensure that the account balances all show zero balance. If they do not, the debtor should contact the credit reporting agencies and ask that the record be corrected.
A recent amendment to the federal Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies to provide you with a free copy of your credit report.
Persistent Creditors
How to deal with persistent creditors after you have successfully gone through bankruptcy...
There are situations where a creditor keeps trying to collect money after you have successfully filed for bankruptcy. The best thing to do in this scenario will depend on the specific facts of your case. If you have any questions, contact an attorney. The following options are probably the most important and useful.
First, make sure the creditor is aware that you received a discharge and that it applies to the creditor's debt. This will often solve the problem.
Second, if the creditor nonetheless persists and is seeking a judgment or execution against you in court, you should assert the discharge as a defense to the collection action. In other words, in your answer to the creditor's complaint, tell the court in which the collection action is pending that you've received a discharge in bankruptcy as to this debt. Be prepared to supply the court with the documents necessary to prove this, especially copies of the discharge and of the docket from your bankruptcy case.
Third, you can file a motion in the bankruptcy court that asks that your bankruptcy case be reopened to deal with the matter. If you and the creditor disagree about whether the creditor's claim was discharged, you can ask the bankruptcy court to determine that issue. If you think the creditor is simply disregarding the discharge in bad faith, you can file a motion to hold the creditor in "contempt" (that is, in deliberate violation of the discharge order), asking that you be awarded damages and sanctions for the contempt. You can also ask that the creditor be enjoined from taking further collection actions while these motions are being determined.
These options are not exhaustive or mutually exclusive. In general, if the first option doesn't work for you, or if the creditor has commenced legal proceedings against you, you would do well to get the help of a bankruptcy attorney.
Non-Payment of Chapter 13 Plans
If the debtor cannot make a chapter 13 payment on time according to the terms of the confirmed plan, the debtor should contact the chapter 13 trustee and explain the problem. If it is a temporary problem and the payments can be made up, the debtor should advise the trustee of the time and manner in which the debtor will make up the payments. Significant changes in the debtor's circumstances may require that the plan be formally modified. If the problem is permanent and the debtor is no longer able to make payments on the plan, the trustee may request that the Court dismiss the case or convert the case to one under another chapter.
Methods of Re-Establishing Credit after Bankruptcy
Sure fire methods for rebuilding your credit after bankruptcy.
One of the first things a debtor seeking to re-establish credit after bankruptcy should consider doing, is applying for a secured credit card such as Visa, Master Card or both. A secured credit card is simply a credit card issued by a bank to a customer who is required to establish a savings account at the bank, which is used as security or collateral for the card. Limit on the card is based on the amount of collateral deposited in the savings account. There may be an annual fee involved, but the benefit of a secured bank card is that they are issued by the banks to persons with poor credit reports in the past and who have the ability to pay the deposit to secure the account.
Other steps to take in re-establishing your credit rating after bankruptcy s include buying a car from a local car dealer who advertises that it specializes in making car loans to persons with bad credit or recent bankruptcies. If you happen to know someone at a local bank, don't hesitate to seek assistance from that source, it could go along way towards establishing your credit.
Rebuilding Credit after Bankruptcy
Rule number one when attempting to rebuild your credit after bankruptcy is to learn from your experience.
Debtors that are emerging from bankruptcy need to use their experience to avoid getting themselves back into the same financial difficulties that brought on the need for bankruptcy in the first place. All too often, this was the easy availability of unsecured credit in the form of unsolicited, pre-approved, credit cards. Remember to budget yourself properly, live within your means, and resist the temptation to incur debt beyond a reasonable ability to repay just for the purpose of re-establishing credit.
Credit Repair Agencies
The last thing you need when financially distressed is to fall prey to one more rip-off!
Above all, avoid the so-called credit repair agencies. These are generally nothing more than unregulated rip-offs preying on the financially-distressed. Most credit repair agencies do nothing more than what debtors themselves can do by exercising their legal right to have their credit reports properly list their outstanding obligations.
Learn more about re-establishing your credit after having gone through bankruptcy.
