Life After Bankruptcy

Okay, you filed for bankruptcy, got a discharge now what? How do you get your good credit back? There are really two parts to this process. First, you need to make sure your credit report is accurate and no discharged accounts appear as still due and owing. Second, you need to make sure all future information added to your credit report is positive information.

The first step is quite simple. Send a copy of your documents to the three Credit Reporting Agencies and advise them you have filed for bankruptcy. You should always send these letters certified mail/return receipt as it strengthens your case. The CRA’s like to argue they never received your package. Please visit “Writing Your Dispute Letters” for more details on this topic. If after 45 days from when they received your dispute, errors or inaccurate information continues to be reported, contact us. It is possible that you have a case and are entitled to a corrected credit report plus $1,000 in statutory damages. You may ask yourself, why is this step so important?

To explain, let’s use this example. Let’s assume that two consumers have the exact same credit report, same age, same debts, same bankruptcy information, and same date of discharge. Both credit reports state they have filed for bankruptcy, but one is clear while the other still has accounts demonstrating outstanding collection accounts, balances, or discharges. Technically, both should have the same, if not very close, credit scores. In reality, in our litigation experience the consumer with outstanding collections, balances, or discharges will always have a substantially lower score. The score is lowered artificially because of the inaccurate information. In those cases, the consumer’s credit is being damaged, many don’t even know why or how, but now you do. You have the right to the maximum accurate credit report – so don’t hesitate to exercise your legal rights — contact us.

Now, the second step. All incoming credit information should be positive. For your information, the bankruptcy stays on your credit report for 10 years from of filing your petition. It does not matter if it was a Chapter 7 or Chapter 13 – it is a total of 10 years from that date.

That does NOT mean you have to wait 10 years to rebuild your credit. On the contrary, start re-building your credit immediately. Understand that this is a new beginning so it is time to make some changes if you have any “destructive” credit habits. Most start again with a secured credit card. There are banks which offer such services. Others start with family members co-signing on a new automobile. Please read our article titled “What is in a Credit Score?” for more details.