What Does Your Post-Bankruptcy Credit Future Hold?
It certainly pays to know what might happen to your credit after you file chapter 7 bankruptcy. Unfortunately, many consumers are far too miserable from constant debt collection actions and money troubles to stop and consider what the future might hold. Before you declare bankruptcy, make it a point to know what to expect when considering future home, auto, and credit card debts. Read below and take action to ensure your credit use is wise and informed after a bankruptcy filing.
1. Stop Avoiding Your Credit Report
Those who have financial problems already know they are in trouble and thus avoid looking at their credit reports. You must, however, get an idea of where you stand both before you file, while you are in bankruptcy, and after your bankruptcy is final.
2. What to Expect Prior to Filing
You want to have something to compare your future improvements to, so print out a copy of your credit report before you file for chapter 7. By filing for bankruptcy, you are making a fresh start, and you should never have to see the black marks you see on your report ever again. Most creditors report late payments, and some report how many days late your account is past due. If you have been sued, the notation for the judgment will be listed. foreclosures and repossessions are also listed. Some medical collection actions may be noted as well.
3. During the Bankruptcy Process
Most chapter 7 bankruptcy actions take only a few months to be complete. During this time, your credit report might appear to be virtually frozen in time. Very little, if any, changes occur while your bankruptcy is in progress.
4. After the Final Petition Is Filed
The final legal paperwork for a chapter 7 is mailed to debtors a few weeks after they attend the creditor's meeting, and it signals the beginning of a new chapter for filers. Another check of your credit report is now in order, and you will note the federal bankruptcy court filing notation. While some creditors will continue to list closed accounts, all accounts included in the debt matrix should disappear within a few weeks. They should not, however, be listed as unpaid debts. If you managed to file before a foreclosure, repossession, or court action, those will never appear on your report. If you see any negative notations of events that occurred after you filed (other than the federal filing note), contact your bankruptcy lawyer immediately.
5. On an Ongoing Basis
If you want to build a fresh new credit history (and most filers do), you will need to make checking your report a priority. Be on the look-out for accounts you did not apply for as well as the reappearance of old accounts that were discharged with the bankruptcy. For example, debts can be sold to other collection agencies who keep contacting you about an old debt that was listed on the bankruptcy. Bankruptcy laws are very strict, and most creditors don't disobey the rules on purpose. Give them your federal filing case number and contact your lawyer if you continue to have issues.
Speak to a lawyer to learn more about chapter 7 bankruptcy law.