Bankruptcy in Brief
a service of the Moran Law Group
As consumers, we have been trained by the credit industry to equate
the contents of our credit report with our credit worthiness.
The two are not the same.
|A credit report may show that
you have faithfully made every payment on time for your entire
life and still you are not worthy of more credit because you can't
ever pay off the credit you have.
What is a credit report
A credit report is a history. Under federal
law, you are entitled to an
accurate history, but not to a re writing of truthful history. That
history can properly include delinquencies
A bankruptcy discharge will not erase discharged creditors or your pre
bankruptcy payment history. After a bankruptcy discharge, the amount
outstanding for each discharged account should be shown as zero.
Your credit report is not a reliable guide to everyone you may owe
money to. Not all creditors report to credit reporting agencies;
your credit report lists only those that do report and the contents
of the public record.
The notation that a debt is charged off does not necessarily mean it
is not legally enforceable. "Charge off" is essentially an
accounting term that indicates that the creditor doesn't expect to collect
the debt; a charge off alters the creditor's income for tax purposes.
It does not relieve the debtor of legal liability for its payment.
Credit reports after bankruptcy
Your bankruptcy can be reported on your credit report for 10 years from the
filing of the case. If you file a bankruptcy and voluntarily dismiss
it before the discharge, the credit reporting agency must report
the dismissal as well as the bankruptcy filing.
Assuming you have income, you should be more credit worthy after a
bankruptcy than you were before, since your old debts no longer have a claim on your future
to the Fair
Credit Reporting Act makes clear that a debt discharged in bankruptcy
be listed as having a 0 balance. FTC OSC section 607, item 6 states:
consumer report may include an account that was discharged in bankruptcy
well as the bankruptcy itself), as long as it reports a zero balance
reflect the fact that the consumer is no longer liable for the discharged
After the discharge, you are entitled
under federal law to have the balance of each discharged debt reported
as "O". The history of delinquencies can be reported, but the balance must be zero.
If it is not so reported, dispute the debt.
Negative history on your credit report is just that: history.
It does not doom you to perpetual credit rejection. It does challenge
you to strengthen your financial present by saving and using credit
Building Better Credit.
your credit score
You don't need to hire anyone to see that errors in your credit report are
corrected or positive information is reported. In fact, many credit repair offers are
scams that, at best, waste
your money and, at worst, involve you in a crime. More.
Under the Fair Credit Reporting Act, you can challenge
information that you believe is inaccurate. If the reporting agency can't
verify the accuracy of the information, they must remove it.
If you have received a discharge in bankruptcy, it is in your interest to have
the discharge noted on your report, since it is proof that the old debt
is no longer legally enforceable.
Consumers are entitled to a free credit report annually from each of
the major reporting agencies. Access
that free credit report.
|To learn what is on
your credit report, order a copy . The three major credit
reporting agencies are listed to the right.
The sites below can help you understand and exercise your rights under the FCRA.
of Fair Credit Reporting Act
questions and answers
on [In]accuracy of credit reports