Chapter 7 Bankruptcy And Your Credit Future
Posted on: 10 March 2020
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Most bankruptcy filers have their minds on a debt-free future when they file. It's true — a chapter 7 bankruptcy filing will likely eliminate most, if not all, debt. What you are left with, however, is a credit picture that is far from clear. Read on to learn more about what to expect after you've filed and how to avoid credit problems after bankruptcy.
Face the Facts
It's not too surprising that those suffering from financial problems avoid looking at their credit reports. You know you have late payments and there may even be court judgments, wage garnishments, and liens on the report. Once you have filed for bankruptcy, it's advisable to review your report so you'll be able to compare future reports. Nothing much will change on the report until your case is complete, however, and it's difficult (if not impossible) to get approved for new credit while your case is still open. Once your case is discharged and you get the final paperwork, the bankruptcy will appear as a federal filing. While a chapter 7 bankruptcy stays on your account for 10 years, you should not have to wait that long to be approved for more credit.
Keep a Close Watch on Your Credit
Accounts, like credit cards and medical debt, that you included in your bankruptcy filing should not be appearing on your report as current. The accounts that previously indicated late payments should be shown as closed and with no negative remarks. If you notice negative information, contact your bankruptcy lawyer. You might want to check your report on a regular basis to ensure that everything stays correct. You will eventually want to apply for credit, after all. All filers should also stay alert to new, unauthorized accounts or any other unusual findings on the report. Bad or erroneous information should be reported to the three main credit bureaus as well.
Deal With Issues Quickly
It is not unknown for bankruptcy filers to encounter problems with creditors after a discharge. In some cases, accounts resurface under new names and you may be billed for an account you are unfamiliar with or that you included in the bankruptcy. Once an account goes into the collections phase, it can be passed from agency to agency. Usually, a quick phone call in which you provide them with your bankruptcy case number will resolve issues but speak to your bankruptcy lawyer to find out more. You do have the right to be financially compensated if creditors continue to interact with you after a debt has been discharged in federal bankruptcy court.
For more information, reach out to a local bankruptcy attorney.