Fix Your Credit Report After Bankruptcy
You paid for a bankruptcy. Many clients don’t understand that bankruptcy has little positive impact on your credit report. You will quickly learn this after your discharge and you go to buy something on credit. This might be a car loan or a new home mortgage. Your dealer, or banker will take one look at your credit report and wonder if some of the debts were included in bankruptcy. Why will this concern them?
They suspect the obligations might have been reaffirmed or not scheduled in your bankruptcy petition. Their next step will be to send you back to me for a copy of your bankruptcy petition and maybe a copy of your discharge. You may well be a bit peeved that you have to make this call. It falls to me to explain that a bankruptcy court has no role in making your credit report is true and accurate. I go on to explain that the debt is in fact discharged and download the petition, schedules and discharge to prove it to you so you can prove it to your banker or car dealer.
Is there a better way to handle this than to waste all this time, and to have to pay for the download of the documents from the court? Yes!
In a consent order the credit reporting agencies:
- Chex Systems
- Med Search
all agreed that within 30 to 60 days of a bankruptcy discharge they will mark each trade line (lawyer talk for entry) on your credit report to read “0 balance discharged in bankruptcy”. This is something they are supposed to do, not the bankruptcy court and not your bankruptcy attorney. If they refuse to do it for a particular creditor there can be consequences under the Fair Credit Reporting Act.
I will assist you to make sure your bankruptcy is properly noted on your credit report for each affected creditor and trade line. Between 60 and 90 days following you discharge you will need to obtain a credit report from each of the reporting agencies. You can do this by calling 877-322-8228. Then bring the reports to my office for review. If there are errors I will help you send the letters to start the challenge process.
Do not attempt to fix these problems on the agency website. As part of the registration process they will have you click a number of boxes, which will obligate you to arbitration of any issues you may have under the Fair Credit Reporting Act. This will limit your access to the courts and deny your right to a trial by jury for recovery of any damages you might suffer as the result of their knowing failure to accurately report your credit. Arbitration benefits them, not you.
Once you have the actual credit reports, simply bring them in for a consultation to look for errors. Problems with a credit report can include:
- Bad Identifying information
- Bills that are not yours.
- Public records that are not yours.
- Incomplete or inaccurate status of any bills or listings.
- Failure to properly reflect the discharged status of bills included in your bankruptcy.
- Bills that were once discharged and miraculously reappear as debts.
I will help you through the challenge process. If the report is properly cleaned up there will be no fee for my assistance. Sometimes a creditor, or the reporting agency refuses to correct an entry that is obviously wrong. That is where I come in. You have a right of action against the reporting agency. I will represent you in these proceedings. The glory of this process is that the Fair Credit Reporting Act allows you to shift your attorney fees to the reporting agency if it is a “knowing” violation. I represent you. I am your attorney. If you win, they pay me as part of the damages.
This doesn’t end here. I am sure you have heard the need to check your credit reports at least once a year. Each time you do, bring them by for a review. Sometimes creditors will change the status of a line item from discharged in bankruptcy to something else that violates the act. If that happens we start the challenge process again.
The goal is for you to enjoy the full benefit of a bankruptcy discharge. If your credit report continues to lock you in the slavery of debt even thought you were freed by bankruptcy court what have you gained? You have a bankruptcy discharge. Invest a little time and energy to feel its full power.
PS: Although I offer this assistance as part of my bankruptcy services, if you had another attorney I will meet with you to review your credit reports, and I will assist you as well.