What Happens After My Bankruptcy Ends
When your bankruptcy ends, most of your debts are released and you no longer need to pay them. However, there may be some debts that you still need to pay find out more on what happens to my debts.
Your name continues to appear on the National Personal Insolvency Index showing your bankruptcy has ended.
What Happens After My Bankruptcy Requirements Are Completed
When you complete all your duties in bankruptcy, you will obtain a type of discharge, which is the official certification of how it was completed.
A record of your bankruptcy will remain on your for several years after your discharge.
Apart from the note of your past bankruptcy, your credit status will be clear. It will be as if you had never had credit. Like a young adult starting independent life, you will have to earn the trust of creditors from the ground up.
Consumers Can Seek Chapter 7 Or Chapter 13 Bankruptcy
There are two types of bankruptcy that consumers can choose if their financial situation warrants it: Chapter 7 or Chapter 13 bankruptcy. The type of bankruptcy you choose will ultimately determine how long it remains on your credit report.
Chapter 7 bankruptcy essentially means any unsecured debt will be wiped out with certain limits and restrictions. The other type is Chapter 13 Bankruptcy, which calls for people to continue paying their debt for several years and afterward, a portion of that debt is discharged.
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If I Filed Bankruptcy Before How Long Before I Can File Again
Imagine you file a Chapter 13 case and do well making payments for a year or two, but then chaos ensues. Perhaps you lose your job, get sick, or find that you can’t keep up with your repayment plan.
Although you may have used a bankruptcy filing to get out of prior financial struggles, unfortunately, federal law limits how often you can file a new bankruptcy case. And even if you’re allowed to file a case, one of the benefits of that filingthe automatic staymay be restricted or delayed.
An automatic stay stops creditors from taking actions against debtors. It stops collections calls, foreclosures, and repossessions.
Can I Remove A Bankruptcy From My Credit Report On My Own
It is possible to pursue removing a bankruptcy from your credit report on your own, and some people have managed to do so. However, it is a time-consuming, labor-intensive process that many people find complicated, confusing, and frustrating.
We encourage you to learn as much as you can about credit report disputes and credit repair processes, then count the real cost of DIY credit repair before committing to handling this important task on your own.
People who have needed to remove a bankruptcy from their credit reports have achieved success by working with a provider like Lexington Law Firm. If other questionable negative items are affecting your credit report and score, we can help you challenge those as well.
Contact us today for a free personalized credit report consultation to find out how we can help you meet your credit goals.
Reviewed by Vincent R. Mayr, Supervising Attorney of Bankruptcies at Lexington Law. by Lexington Law.
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How Long Does A Collection Impact Your Credit Report
There are two time periods to consider if you have an account sent to a collection agency:
- The statute of limitations which bars lawsuits or legal actions
- The length of time collection accounts will remain on your credit report.
A collections account will remain on your credit report for seven years, whether paid or not. Depending on the credit bureau, the debt will remain on record either from the date of your last payment or from the date you missed your payment due date. Having accounts in collection will lower your credit score and affect your ability to get a loan.
If your debt is older than that, likely, it will no longer appear on your credit report.
Making a payment, or partial payments, to a debt collector resets this clock as well.
So what do you do if the debt is too old under limitations law but is still on your credit report? You need to decide how this will impact your finances. Collection accounts will hurt your and may limit access to a loan at reasonable rates. If you are not planning on borrowing any time soon, this may not matter. You can wait out the seven years for the debt to be removed from your credit report.
If you agree on a settlement, you can ask the collection agency to make a goodwill deletion. Get this in writing as part of your payment and release agreement.
Can Making A Payment Or Paying A Collection Reset The Seven Year Statute
A lot of consumers I speak with are afraid to pay off a collection or even speak to the collection agency because they fear doing so will re-age an old debt and reset the seven years. This is absolutely false, nothing you do can reset the seven years. Paying it wont, calling them wont, disputing it wont.
Just because the FCRA and the law say thats how long the items can credit report for, doesnt mean things wont report for longer. Credit bureaus are handling millions of files and mistakes definitely happen. Collection agencies can also re-age the debt causing the reporting period to reset. Its up to you to know your dates and hold the credit bureaus accountable to the reporting statute of limitations, AKA the seven year rule!
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Dispute Inaccurate Bankruptcy Entries With A Credit Dispute Letter
If you were able to find some inaccurate information within the credit report, then your next step will be to dispute the inaccurate entries with each of the credit bureaus using a .
The best-case scenario is that theyll be unable to verify the bankruptcy and remove it from your credit report. This is unlikely if its a recent bankruptcy. The older the bankruptcy, the better chances you have of getting it removed from your credit report this way. Nonetheless, if it happens, then great, you can skip the other steps.
If the bankruptcy is verified by the credit bureaus, continue to the next step.
After Filing Bankruptcy In Canada How Long Will It Be On My Credit Report
How long will bankruptcy show on credit reports in Canada for the first time bankrupt after receiving a ?
There are two large credit reporting agencies in Canada: Equifax and Trans Union. Unfortunately neither of them is very forthcoming with regards to their credit reporting practices.
A few years ago you could go to their websites and read a complete description of their reporting procedures. Today, unfortunately, their websites are mostly sales vehicles, so that they can sell you their credit reporting services, and thats a key point to remember: Credit bureaus are profit making businesses: they exist to sell credit information to the lenders and to consumers . They are not impartial arbitrators they are there to earn a profit. Theres nothing wrong with earning a profit, but its important that you understand their perspective.
With that background, based on the most recently available information , Equifaxs policy is to retain the note about your first bankruptcy on their system for six years after the date of discharge.
So, for example, if you in January of year 1, and you were not discharged until October, year 2, the note about your bankruptcy would remain on your credit report for six more years, until the end of October, year 8. Its not the date that your bankruptcy started that matters its the date you were discharged.
In the past Trans Union maintained this information for seven years.
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When Can Your Bankruptcy Be Reopened
If someone requests that your bankruptcy case be reopened, the court will do so if there is a good reason. But whether or not your bankruptcy will be reopened is at the court’s discretion. In most cases, the court will reopen a closed bankruptcy if:
- the debtor has additional property or assets that the court must administer
- the court must give some type of relief to the debtor, or
- there is another valid reason or cause.
Who can request that your bankruptcy be reopened? In general, you, the bankruptcy trustee, or any other party in interest may ask the court to reopen your bankruptcy case. The basis for reopening a bankruptcy will typically depend on which party is making the request .
Can I Apply For Credit
After your bankruptcy has ended, there is no restriction on applying for loans or credit. Its up to the credit provider to decide if they will lend you money.
Your credit reportwill continue to show your bankruptcy for either:
- 2 years from when your bankruptcy ends or
- 5 years from the date you became bankrupt .
It can take time to rebuild your credit rating.
For more information regarding your credit report, contact a credit reporting agency. Information about credit reporting agencies is available at ASIC’s MoneySmart.
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What Happens To Your Credit Score After Filing Bankruptcy
Chapter 7 bankruptcy and Chapter 13 bankruptcy filings show up on your credit report. How long it shows up depends on which type of bankruptcy you file. Chapter 7 bankruptcy stays on your credit report for 10 years after the filing date. A completed Chapter 13 bankruptcy stays on your credit report for 7 years after the filing date, or 10 years if the case was not completed to discharge.
As a result, filing bankruptcy will initially lower your credit score. How much your credit score will drop depends on how high or low it was before bankruptcy. Generally, a decrease between 100 to 200 points can be expected.
The good news is that you can begin rebuilding your credit as soon as your bankruptcy discharge is entered. It’s possible to have a better score within 1â2 years of filing. The credit scores of most bankruptcy filers are already lower because of missed payments. After the court grants a discharge, most unsecured debts are erased. Credit scores improve because there are no more missed payments and discharged accounts show a zero balance.
After Chapter 7 and Chapter 13 bankruptcy is filed, you will get credit card offers in the mail. These offers can be for secured credit cards, sometimes called prepaid cards, which require a cash deposit. Or, offers can be for unsecured credit cards, but will likely have high interest rates or annual fees.
Building Credit After Chapter 7 Bankruptcy
Most can rebuild their credit rating and have a better score than ever within 1 – 2 years after they file Chapter 7 bankruptcy. But, you canât take this for granted. To get the full benefit of your bankruptcy filing, youâll have to make an effort to improve your credit score.
Getting new credit after filing bankruptcy â itâs easier than you might think!
One of the biggest surprises for many bankruptcy filers is the amount of car loan and credit card offers they receive – often within a couple of weeks of filing their case. Itâs a lot! Why?
Filing Chapter 7 bankruptcy makes you a low credit risk
The Bankruptcy Code limits how often someone can file a bankruptcy. Once you get a Chapter 7 bankruptcy discharge, youâre not able to get another one for 8 years. Banks, credit card issuers, and other lenders know this.
They also know that, with the possible exception of your student loans, you have no unsecured debts and no monthly debt payment obligations. This tells them that you can use all of your disposable income to make monthly payments.
Beware of high interest rates.
Pay close attention to the interest rates in the new credit offers you receive. Credit card companies and car loan lenders have the upper hand here. They know you want to build your credit rating back to an excellent FICO score. And they know that youâll be willing to pay a higher interest rate than someone with perfect credit and no bankruptcy on their record.
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Can The Discharge Be Revoked
The court may revoke a discharge under certain circumstances. For example, a trustee, creditor, or the U.S. trustee may request that the court revoke the debtor’s discharge in a chapter 7 case based on allegations that the debtor: obtained the discharge fraudulently failed to disclose the fact that he or she acquired or became entitled to acquire property that would constitute property of the bankruptcy estate committed one of several acts of impropriety described in section 727 of the Bankruptcy Code or failed to explain any misstatements discovered in an audit of the case or fails to provide documents or information requested in an audit of the case. Typically, a request to revoke the debtor’s discharge must be filed within one year of the discharge or, in some cases, before the date that the case is closed. The court will decide whether such allegations are true and, if so, whether to revoke the discharge.
In chapter 11, 12, and 13 cases, if confirmation of a plan or the discharge is obtained through fraud, the court can revoke the order of confirmation or discharge.
Ii Collection Calls When The Date Of Your Last Payment Is Less Than Six Months Ago
Original creditors and debt buyers employ their own collectors. These are often referred to as a firms inhouse collection department. Regardless of whether your unpaid account is owned by your original creditor or a debt buyer for the first six months your account remains unpaid the odds are very high that you are receiving collection calls from collectors employed by your creditor.
As a general rule, provincial governments do not regulate the conduct of creditors who are collecting their own debts. This means that if you are receiving abusive phone calls from a collector employed by your creditor you will be wasting your time filing a complaint with the government body regulating collection agencies in your province.
The federal government has enacted some legislation that provides some protection to consumers who are receiving collection calls where the debt is owed to a federally regulated financial institution. This means that if you are receiving collection calls in connection with monies owing to a bank or a credit card companyregardless of the employer of the collectorthen you can file a complaint with a federal regulator.
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What Happens If I Declare Bankruptcy
When you declare bankruptcy, you will file a petition in federal court. Once your petition for bankruptcy is filed, your creditors will be informed and must stop pursuing any debt you owe. The court will then request certain information from you, including:
- The total amount of debt you owe
- A complete list of all your creditors
- An accounting of your total income
- An accounting of your outgoing expenses
You are permitted to represent yourself in bankruptcy court. You are also allowed to hire a lawyer who can serve as your advocate and help you navigate the complicated process of what happens if you declare bankruptcy. Having your debt discharged or reorganized in bankruptcy court can take a lengthy period of time. Should you get a lawyer, your lawyer can help you understand the relevant timeline in your bankruptcy case.
Find Help For Car Loans And Mortgages
When the time comes to buy something larger with debt, such as a car or house, you may need to have another party, such as your parents, cosign the loan.
Without this, you may not be able to obtain financing at all. With it, you may be able to get something resembling decent terms on your loan, depending on the credit score of the cosigner. If credit is not available, you may simply have to wait until you can pay for a car with cash or consider a personal loan from your relatives and/or friends.
Also an issue if you’re buying a car: After declaring bankruptcy, you may find that insurance companies are reluctant or unwilling to insure you. If your past credit history puts you in what insurers consider a high risk pool, there are companies that will provide car insurance for youcharging more, but you still need it to drive.
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Maintain A Job And A Home
It is vitally important that you getand keepa job as soon as possible, if you dont have one already. Finding a good place to live ranks a close second, if this is an issue. Stable residential and employment histories are necessary because they show creditors that you are reliable.
A growing number of landlords are checking credit references as a means of screening out possible unreliable tenants. If you are not able to rent an apartment, you may have to room with a friend or relative until your credit improves.
Employers may also request credit scores and histories of their potential applicants as a measure of personal responsibility. A spell of bad luck can fuel a vicious cycle that may prevent you from getting a job that pays enough for you to pay off your debts. Do what you can to push forward anyway and find a job that can be the foundation of putting the bankruptcy behind you.
Myth #: Some Creditors Are Immune From The Bankruptcy And Can Still Sue You
This is absolutely false. In fact, one of the primary reasons to file bankruptcy is to eliminate ALL collection activities. When you file the bankruptcy petition, whether through Chapter 7 or Chapter 13, you and your property receive automatic protection from the court against your creditors , which also includes the creditors attorneys, collection agencies, representatives, and/or agents.
Federal law specifically prohibits your creditors from contacting you for any reason, including through written correspondence, monthly bills, or phone calls. Creditors must cease all collection efforts against you, meaning they cannot file a new suit, continue a prior lawsuit, or collect on a prior legal judgment.
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