AFTER YOUR BANKRUPTCY: HOW TO HAVE A FRESH START!
Dec. 23, 2013
You made a decision to file bankruptcy due to the financial stress. The law threw you a life preserver and you are on the way to financial recovery. Your bankruptcy is nearly done or done. You may even have an Order of Discharge in your hand from the bankruptcy court. Now what do you do? (The Answer may or may not be: “I’m Going To Disneyland!” This is not your Super Bowl victory but it may seem like it.)
The Order of Discharge often isn’t the answer to getting a fresh start after bankruptcy. It is a first step though. About 60-90 days after you receive that Order of Discharge, you should call the number provided on thewww.annualcreditreport.com site and order your credit reports. Consumers are entitled to a free credit report every year or when a negative decision is made by a creditor relying on a credit report. There are three main reporting agencies: Equifax, Experian, and Transunion. You should request your report be mailed to you by each of those three reporting agencies. There is an option to download the report or to view it on the internet. Please do not use that easy option. As you click on each “agree” or “okay” button on the screen, there are many many lines of writing. Several of those lines deal with you waiving your right to sue a credit report agency for false reports. Just have the report mailed to you. If you are married and filed a joint bankruptcy, each of the spouses must request their own reports. There are many imposter websites that will claim to be “free”…don’t believe the hype. Go to www.annualcredi treport.com to get your report.
If you ever had a problem with a checking account or overdrafts, you should get additional credit reports from Telecheck, Early Warning Services, and Chexsystem. These are the agencies that banks and credit unions rely on when the bank or credit union is making a decision about whether you can open an account with them. These agencies are not part of the www.a nnualcreditreport.com site so you will need to go to each of the sites to request a report.
So, you are now up to six different reports. The formats of these reports are somewhat similar. First will be the public records section where any court case may be listed. Next, the report may list all the creditors. The report may separate out the debt collectors from original creditors.
The review of the credit report is very important. There will be a line under each of the creditors that indicates whether a balance is due. That balance should be ZERO following a bankruptcy (unless it is a debt/creditor that is not discharged, like child support, taxes, criminal fines or penalties). There may or may not be a line saying “Chapter 7 Bankruptcy”.
If any of your creditors is still listing a balance, then the next step is for you to dispute the report of that creditor. The Federal Trade Commission offers a sample letter to consumers who need to dispute. That sample letter is here. I usually advise my clients to send a copy of the letter to the creditor who is reporting inaccurate information. And please, make two extra copies (one for your file and one for the attorney)
When a consumer disputes something on a credit report, the agency must investigate the dispute. The creditor can either verify the accuracy, update or remove the information. The credit reporting agency has deadlines for their response to go back to the consumer.
If a creditor verifies the report (saying, “yeah, the money is still owed”), you should seek legal advice regarding the creditor violating the order of the bankruptcy court. There may also be a Fair Credit Reporting Act violation. The next step after that — could be a lawsuit against the original creditor, the debt collector (if they are also reporting wrongly) and the credit reporting agency. Only an attorney experienced in these kind of cases can evaluate the situation and provide advice about your options.
1. Order of Discharge
2. Order your credit reports
3. Read your credit reports
4. Dispute any balances that are no longer owed with both the original creditor and the credit reporting agency.
5. Wait for a response
6. Read the response
7. If the response doesn’t clear up the problem, seek legal advice from an experienced attorney.