Become An Authorized User On A Credit Card
If you dont want to take out a secured credit card, you can ask a family member or friend who has good credit to add you as an on one of their credit cards. You may see an increase in your credit score if the issuer reports the cards positive payment history to the three main credit bureaus. However, your score could take a dip if the primary cardholder makes a late payment or maxes out their credit limit.
Review Your Credit Reports
Monitoring your credit report is a good practice because it can help you catch and fix credit reporting errors. After going through bankruptcy, you should review your credit reports from all three credit bureausExperian, Equifax and Transunion. Due to Covid-19, you can view your credit reports for free weekly through April 20, 2022 by visiting AnnualCreditReport.com.
While reviewing your reports, check to see if all accounts that were discharged after completing bankruptcy are listed on your account with a zero balance and indicate that theyve been discharged because of it. Also, make sure that each account listed belongs to you and shows the correct payment status and open and closed dates.
If you spot an error while reviewing your credit reports, dispute it with each credit bureau that includes it by sending a dispute letter by mail, filing an online dispute or contacting the reporting agency by phone.
How Long Does Bankruptcy Affect Your Credit Score
You can expect recovery to begin fairly quickly after discharge, though there is no hard and fast timeline. A lot will depend on how you move forward: You must be very diligent about paying your bills as agreed. This is the best way to recover as quickly as possible.
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Can You Buy A House After Bankruptcy
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*As of July 6, 2020, Rocket Mortgage® is no longer accepting USDA loan applications.
Do you have a bankruptcy on your record? If so, it can feel like youll never be able to return to financial normalcy. But the truth is that bankruptcy isnt a permanent black mark on your credit report. Its even possible to buy a home after bankruptcy if you know which steps to take.
Well take a closer look at how to buy a home after bankruptcy. Well also show you how long you need to wait after filing to apply for a loan and how you can maximize your chances of success.
When Does The Discharge Occur
The timing of the discharge varies, depending on the chapter under which the case is filed. In a chapter 7 case, for example, the court usually grants the discharge promptly on expiration of the time fixed for filing a complaint objecting to discharge and the time fixed for filing a motion to dismiss the case for substantial abuse . Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court. In individual chapter 11 cases, and in cases under chapter 12 and 13 , the court generally grants the discharge as soon as practicable after the debtor completes all payments under the plan. Since a chapter 12 or chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs about four years after the date of filing. The court may deny an individual debtor’s discharge in a chapter 7 or 13 case if the debtor fails to complete “an instructional course concerning financial management.” The Bankruptcy Code provides limited exceptions to the “financial management” requirement if the U.S. trustee or bankruptcy administrator determines there are inadequate educational programs available, or if the debtor is disabled or incapacitated or on active military duty in a combat zone.
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Can You File For Bankruptcy More Than Once
You can refile for bankruptcy multiple times, but a discharge can only be obtained after a determined waiting period. If you file for Chapter 7, you must wait eight years from the original date of the first case. You can file for Chapter 13 within four years of completing a Chapter 7 case.
If your original case was Chapter 13, you can refile or apply for Chapter 7 without a waiting period, as long as the original debt was discharged. If the requirements aren’t met, then you must wait six years before refiling.
A recent study by Debt.org found that 8 percent of those who filed for bankruptcy had filed at least once before. If the request is accepted, the court requires you to prove why the case will be successful. This is in accordance with The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 , which prevents fraudulent people from compulsively refiling.
Filing for bankruptcy is a difficult experience and theres a long road to recovery. Seeking from an advisor is one of the best forms of prevention. If you do find yourself having to file, know that there are resources available to help get you back on track.
Other Situations Where You Are Eligible For A Free Credit Report
If you are a victim of identity theft, you are entitled to place a fraud alert on your file and to receive copies of your credit report from each of the three credit reporting companies free of charge, regardless whether you have previously ordered your free annual reports.;
For more information on ID theft, including advice for victims and tips on prevention, review the Attorney Generals Consumer Alerts: Identity Theft Prevention and Identity Theft Recovery.
If a company takes adverse action against you, such as denying an application for credit, insurance, or employment, you are entitled to a free credit report if you ask for it within 60 days of receiving notice of the adverse action. The notice will give you the name, address, and phone number of the credit reporting company to contact.
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Make Sure The Right Accounts Were Reported
After your debts are discharged, review your credit reports to make sure that only the accounts that were part of your bankruptcy are reported by the as discharged or included in bankruptcy on your reports. If you find mistakes, notify the credit bureaus and dispute the errors on your credit reports .
What Accounts Are Included In Bankruptcy
Usually, a person declaring bankruptcy is having serious difficulty paying their debts and their accounts are often significantly delinquent.
If an account was delinquent when it was included in the bankruptcy, it will be deleted seven years from its original delinquency date, which is the date the account first became late and was never again brought current. Declaring bankruptcy does not alter the original delinquency date or extend the time the account remains on the credit report.
If the account was never late prior to being included in bankruptcy, it will be removed seven years from the date the bankruptcy was filed.
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Fix Mistakes In Your Credit Report
When you get your credit report, check that:
- all the loans and debts listed are yours
- details such as your name and date of birth are correct
If something is wrong or out of date, contact the credit reporting agency and ask them to fix it. This is a free service.
Some companies may try to charge you to get all negative information removed from your credit report. The only thing they can ask the credit reporting agency to remove is wrong information. And you can do that yourself see .
If there are loans or debts in your report that you know nothing about, it could mean someone has stolen your identity. See identity theft for what to do.
Patton Knipp Dean Llc: Home Of The Complete Bankruptcy
Most consumers who pursuebankruptcy choose either Chapter 7 or Chapter 13. While both of these processes are geared toward everyday people who have become entrapped in debt, and both ultimately wipe away qualifying debt, they involve very different steps. An experienced bankruptcy attorney can help you determine which type of bankruptcy is right for you.
Why Call Our Chapter 13 Bankruptcy Lawyers?
- No-Money-Down Comprehensive Bankruptcy Services
- Free Consultation to Discuss Your Debt Relief Options
- 1,000s of Bankruptcy Cases Successfully Handled
- We’re Located in Gladstone, Independence, St. Joseph & Lenexa
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Bankruptcy Information Can Be Wrong
You may want to hire a credit repair attorney if your record shows inaccurate financial or bankruptcy information. They can speak with credit reporting agencies, credit card companies, or credit card issuers if you are having personal finance trouble. An attorney can also step in if a company does not discharge your debt correctly or you fall into a credit counseling scam.
Remember: A bankruptcy discharge legally stops creditors from harassing you. You have rights if a company is not following the process or respecting your bankruptcy filing.
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Contact An Experienced North Carolina Bankruptcy Attorney
If you are dealing with overwhelming debt,;schedule a free consultation today;with our compassionate consumer bankruptcy attorneys to discuss your options. At Sasser Law, youll work directly with a board-certified bankruptcy attorney. We pride ourselves on giving straightforward and honest legal advice.
The Sasser Law Firm serves individuals and businesses throughout North Carolina, including in Wake, Harnett, Johnston, Durham, Orange, Granville, Vance, Franklin, Warren, Nash, Lee, Chatham, and Moore counties.
This post was originally published in October 2019 and has been updated for accuracy and comprehensiveness in August 2021.
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When Is Bankruptcy Removed From Your Credit Report
A Chapter 7 bankruptcy can stay on your credit report for up to 10 years from the date the bankruptcy was filed, while a Chapter 13 bankruptcy will fall off your report seven years after the filing date.
After the allotted seven or 10 years, the bankruptcy will automatically fall off your credit report.
What Should You Do To Improve Your Credit Score After A Bankruptcy
After you have filed for bankruptcy, it will be very difficult for you to be approved for any type of credit, including regular unsecured credit cards. So, you should ease back into borrowing money by applying for a secured credit card. A secured card is just as good for your credit as is an unsecured credit card, but there is a difference. With a secured credit card, your credit limit is determined by a security deposit that you give the issuer.
For example, if you want a $500 credit limit, the card issuer will ask you for a $500 deposit. The security deposit is kept by the bank as collateral in the event that you fail to repay your credit card. Usually, if you use the credit card and make all of your payments on time, the card issuer will return the security deposit to you within 12 to 18 months.
Dont be discouraged from applying for a secured credit card after your debt has been discharged. Its one of the greatest ways to build a good credit history after bankruptcy. That said, make sure to make all of your payments on time and dont fall back into the bad habits that cause you to file for bankruptcy the first time.
Here are some quick tips on improving your credit score:
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Whats Involved In Chapter 13
The most important aspect of Chapter 13 bankruptcy is the repayment plan. This type of bankruptcy will allow you to tackle past-due payments through a single, affordable monthly payment that takes into account your financial circumstances. At the end of the three- or five-year repayment plan, any qualifying debt that hasnt been paid off will be discharged .
Keeping Your House In Chapter 13 Bankruptcy
Bankruptcy can bring up visions of lost assets, including a SOLD sign plastered on your beloved home. Under the provisions of Chapter 13 bankruptcy though, this fear doesnt have to come true.
Chapter 13, commonly referred to as the wage earners plan, can be a wise choice for people who find themselves under a mountain of debt but still have steady income. Unlike Chapter 7 bankruptcy, in which eligible assets can be sold off to settle debt, Chapter 13 allows debtors to propose a repayment plan typically three to five years depending on income level. If debtors follow the plan and all conditions are met, they receive a discharge of the debts included in the plan.
Crucially, a Chapter 13 bankruptcy could also end with the debtors homeownership intact.
The repayment plan can incorporate missed mortgage payments, allowing homeowners to become current with their lender. However, the plan does not release the debtor from the established mortgage payment schedule the debtor must still make those monthly payments during the repayment plan.
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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.
How To Remove A Bankruptcy From Your Credit Report
Going through a bankruptcy is a huge burden, both emotionally and financially. It can also affect your credit score for years. While it can take some difficulty, however, it is possible to have those negative items removed early. Well take you step-by-step through the process.
Contents
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How Can You Rebuild Credit After Bankruptcy
Declaring bankruptcy is a major decision, and it can have a big impact on your credit profile. But, its effects wont last forever. To learn more about how you can improve your credit health, one step at a time, check out this blog on how to rebuild your credit history.
Disclaimer: The information posted to this blog was accurate at the time it was initially published. We do not guarantee the accuracy or completeness of the information provided. The information contained in the TransUnion blog is provided for educational purposes only and does not constitute legal or financial advice. You should consult your own attorney or financial adviser regarding your particular situation. For complete details of any product mentioned, visit transunion.com. This site is governed by the TransUnion Interactive privacy policy located here.
What You Need to Know:
There are various types of credit scores, and lenders use a variety of different types of credit scores to make lending decisions. The credit score you receive is based on the VantageScore 3.0 model and may not be the credit score model used by your lender.
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Updating Bankruptcy To Show Discharged
Once discharged, the bankruptcy filing listed on your credit report will be . Any accounts that were included in the bankruptcy will also be updated by your lenders to show they have been discharged and the balance owed is now zero.
Although you will no longer be responsible for paying those balances, the history of the accounts will remain, including any late payments made on the account.
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What Is The Difference Between Chapter 7 And Chapter 13 Bankruptcy
If you do ultimately decide to file, one of the first big decisions you’ll make is whether to file Chapter 7 or Chapter 13 bankruptcy. These chapter names refer to sections of the U.S. Bankruptcy Code where it’s outlined how, exactly, your debt is taken care of in each process. The choice to file one or the other determines whether you’ll be put on a debt repayment plan or if your debts will be settled with the property you own. If you find yourself at a crossroads, start here to get a grasp on what’s ahead.
Does Bankruptcy Wipe Your Credit Report Clean
Myth: All bankruptcy debts will be wiped clean from your credit report.
The truth: While bankruptcy may help you erase or pay off past debts, those accounts will not disappear from your credit report. All bankruptcy-related accounts will remain on your credit report and affect your credit score for up to seven years or as long as they normally would, though their impact will diminish over time.
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Write A Letter Of Explanation
Your lender takes a careful look at your finances when you apply for a mortgage. Every time a lender issues a mortgage, they take a risk. Lenders need to know that youll make your payments on time every month. Of course, a bankruptcy on your record is a major red flag.
You can increase your chances of getting a mortgage after bankruptcy by writing a letter of explanation. A letter of explanation tells your lender more details about your bankruptcy and why you needed to declare bankruptcy.
You might want to include details on the circumstances that led to your filing and how your financial life has changed since then. Also, explain the steps youve taken to prevent a future bankruptcy as well like paying off debt and building an emergency fund.
A letter of explanation isnt a requirement to get a mortgage after bankruptcy, but it can help your lender see the bigger picture instead of just a set of numbers. Include your letter of explanation with your mortgage application when you request a preapproval.
