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Your Credit Report during Bankruptcy

CreditReportGraphicWhat your creditors are able to report to the credit bureaus is controlled by the Fair Credit Report Act, also referred to as the FCRA, and requires your creditors to only report information that is accurate and correct. Once you receive your bankruptcy discharge your creditors are only allowed to report your discharged debts as having a balance of zero, along with the fact that is was included in a bankruptcy. In order to ensure that your creditors are reporting the most accurate information after having received your bankruptcy discharge, it is best to wait 30 to 60 days after receiving your discharge and then pull your credit report from all three credit bureaus. Once you have your credit reports from each of the three credit bureaus you should review each of them in great detail; making sure that each of your debts included in your bankruptcy is being reported as having been included in the bankruptcy and with a zero balance. If one of your creditors is incorrectly reporting the status of one of your debts you should then dispute it through the FCRA. Keep in mind that a creditor should never report a discharged debt as having a balance, being active, late, charged off, or as being a new debt.

If you are planning on filing a Chapter 13 Bankruptcy, your debts will not appear as having been included in the bankruptcy and with a zero balance until you finish your Chapter 13 Plan and receive your discharge; approximately 5 years after you file. However, as soon as you file your bankruptcy, your creditors are supposed to stop reporting to the credit bureaus under the original credit agreement. If they choose to continue reporting, they should report according to your confirmed Chapter 13 Plan. This will allow your credit report to slowly begin to improve shortly after you file bankruptcy, instead of having to wait the entire 5 years before your credit begins to improve. If a creditor is reporting information that is not correct, you dispute it through the FCRA just like you would if a creditor was reporting incorrect information after you received your discharge.

How creditors should report debts during a Chapter 13 Bankruptcy Case was decided in a 2008 case. Before then, there were no rules telling creditors how they should report a debt that is being included in a Chapter 13.

If you are contemplating filing either a Chapter 7 or a Chapter 13 Bankruptcy and have additional questions or concerns, contact an experienced bankruptcy attorney at the Law Office of David M. Goldman, PLLC. We are here to help you decide whether bankruptcy makes sense for you and help you make the best decision for you and your family.

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