Your Credit Report After Bankruptcy
So, thats the BAD news.
The GOOD news is that its relatively easy to figure out what your credit report should look like after your bankruptcy discharge.
First: Youve got to know that theres a significant risk of this happening and care enough to GET YOUR CREDIT REPORTS from all three bureaus .
You can use www.annualcreditreport.com or call each of them and buy one report dont pay for the score for about $9 and have it mailed to your house.
Do this no less than 90 days from your date of discharge, but no more than 180 days from the date of discharge.
Who Can Be Made Bankrupt
A bankruptcy order can be made for one of three reasons:
- you cant pay what you owe and want to declare yourself bankrupt
- your creditors apply to make you bankrupt because you owe them £5000 or more
- an insolvency practitioner makes you bankrupt because youve broken the terms of an individual voluntary arrangement
After Your Bankruptcy Is Discharged
Once you are discharged from bankruptcy, your credit rating will be R9. An R9 rating is the lowest credit rating you can have. You will have this rating for 6 years if it was your first bankruptcy and for 14 years if it is your second bankruptcy.
An R9 credit rating can make it hard to get a mortgage or a credit card. For example, instead of a credit card, banks might give you prepaid cards or cards that require you to collateral. It might also be hard to get other types of loans, or even good interest rates on loans.
If it is your first bankruptcy, you must wait 6 or 7 years for the information about your bankruptcy to be removed from your credit report. Both your credit rating and credit score will also be erased. Your credit report will look like you never had any credit before.
You will have to start building your credit again. You can do this by opening a bank account and getting a credit card. It is important to use your credit carefully so you do not get in debt again.
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Types Of Bankruptcy Discharges
Individual debtors can file for Chapter 7 or Chapter 13 bankruptcy protection. The trustee will liquidate your nonexempt assets and divide the proceeds among your creditors in a Chapter 7 bankruptcy. Any debt that remains will be discharged or erased.
You’ll enter into a payment plan over three to five years that repays all or most of your debts if you file for Chapter 13 protection. Any debt that remains at the end of your repayment plan will be discharged.
A Chapter 13 bankruptcy allows some debts to be discharged that can’t be discharged in Chapter 7 proceedings. This includes marital debts created in a divorce agreement, although not spousal support or alimony, as well as court fees, certain tax-related debts, condo and homeowners’ association fees, debts for retirement loans, and debts that couldn’t be discharged in a previous bankruptcy.
When The Bankruptcy Order Is Made
The early stages of a bankruptcy are normally handled by an official receiver. An official receiver works for the Insolvency Service and is attached to the court. They will also be your trustee unless an insolvency practitioner is appointed to take over that role. The trustee will realise any assets .
The official receiver will write to you within 2 weeks of the bankruptcy order being made, explaining what you need to know and what you must do.
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Your Responsibilities Don’t End When You Receive A Discharge
Just because you received a discharge doesn’t mean that you have no more responsibilities in your bankruptcy. If you have a complex bankruptcy with ongoing lawsuits or appeals, your case might remain open for a long time after the court grants your discharge.
In addition, if you have nonexempt property that the trustee has not abandoned, it will remain property of the bankruptcy estate. The court will not close your case until the trustee files a report stating that he or she has administered all property of the estate.
Until the court closes your case, you have a duty to cooperate with the trustee. This means that you may still be required to:
- turn over nonexempt assets to the trustee
- provide additional information or documentation
- testify in a pending lawsuit, or
- appear at a deposition or 2004 examination.
Getting Public Records Changed
After discharge from bankruptcy, your details will still be included in several public records. Some of these will be removed automatically after a certain time, while you’ll need to take action to get others changed, as follows:
- your details will automatically be removed from the Insolvency Register 3 months after your discharge
- if you want your credit record to show you’ve been discharged, you should send confirmation to each of the credit reference agencies and ask them to update your file – remember the bankruptcy will show on your file for 6 years after the bankruptcy order
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What Is A Bankruptcy Discharge
When a bankrupt is discharged from bankruptcy, he/she is released from the legal obligation to repay debts that existed on the day that the bankruptcy was filed, except for the following types of debt:
- Support payments to a former spouse or to children
- Fines or monetary penalties imposed by the Court
- Debts arising from fraud
- Student loans if fewer than seven years have passed since the bankrupt stopped being a full- or part-time student.
Are You Interested In Filing Bankruptcy
If you havenât filed bankruptcy yet and youâd like to get your debt discharged, you can consult a bankruptcy attorney for legal advice or ask a local legal aid office for assistance. You can even file bankruptcy pro se with Upsolveâs web app to help you reach your goal of obtaining a bankruptcy discharge order for your own fresh start.
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Figuring Out Which Debts Are Discharged
The reason it does not state which debts are discharged is that it is simply impossible.
The bankruptcy code provides numerous exceptions to which debts are discharged. These exceptions are codified in section 523 of the Bankruptcy Code.
To further complicate matters, each bankruptcy chapter incorporates various parts of section 523 differently, so a debt that is discharged in a Chapter 13 case, for example, may not be discharged in a Chapter 7 or 11, etc.
Some of these exceptions, such as debts incurred through fraud, require the creditor to actively object within a very specific time frame and then prevail at trial, in order for the debts to not be discharged. But many others are automatically not discharged if certain conditions are met, and those conditions frequently have many exceptions of their own.
A good example of this is tax obligations. For a quick look at how income tax dischargeability is determined, my taxes in bankruptcypage might be helpful.
A lot of the criteria for determining whether a debt is discharged is subject to argument and can only be decided by a Judge if brought in front of the judge by one of the parties specifically. Without that, the best the court can do is issue a general discharge that applies to all those debts which do not have a specific exception from discharge in the bankruptcy code.
Can A Discharge Be Revoked In A Chapter 13 Bankruptcy
A debtor is ineligible for discharge under chapter 13 if he or she received a prior discharge in a chapter 7, 11, or 12 case filed four years before the current case or in a chapter 13 case filed two years before the current case. Can the discharge be revoked? The court may revoke a discharge under certain circumstances.
Asset Chapter 7 Cases Take Longer
If the case involves assets the trustee needs to sell, the case could go on for months or years after the discharge. The amount of time will depend on whether the Chapter 7 trustee needs to file lawsuits against creditors or others or sell assets like real estate, vehicles, or businesses.
Once the trustee has a pool of funds, the court will ask the for what the debtor owes. The trustee will file objections with the court to any claim that is deficient or improper, and the court will hold hearings on them. The trustee mails checks to those creditors with allowed claims and will file a report after distributing funds. Only then will the court close the case.
Are You Getting A Refund
Refunds that are issued as a result of returns for years prior to the year of bankruptcy are considered to be the property of the estate in bankruptcy. As a result, these refunds will be sent to the trustee. Any refunds issued in relation to returns for years subsequent to the year of bankruptcy will be sent to you, unless the trustee has obtained a court order.
For the year of bankruptcy, any issued refund related to the pre-bankruptcy return will be sent to the trustee. Issued refunds related to the post-bankruptcy return will also be sent to the trustee if your bankruptcy assignment date is July 7, 2008, or later. Post-bankruptcy refunds that are issued for bankruptcies with an assignment date prior to that will be sent to you, unless the trustee has obtained a court order or has provided us with an Authorization and Direction letter.
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Difference Between Entering A Discharge And Closing A Bankruptcy Case With A Final Decree
When the court enters a discharge in your bankruptcy, it wipes out your personal liability for all debts that were included in the discharge. In Chapter 7 bankruptcy, you normally receive a discharge a few months after filing your case. If you filed for Chapter 13 bankruptcy, you typically have to complete your Chapter 13 repayment plan before the court will grant you a discharge.
Even if you receive a discharge, your bankruptcy remains open until the court enters a final decree or order closing your case. But the court will not close your bankruptcy if the trustee is continuing to administer your case .
Request The Notice Online
Bankruptcy discharge notices are public record and are available online through the Public Access to Court Electronic Records, PACER, system. To access these records you must set up an account with the system. Once you have an account you can search for the status of a bankruptcy by entering the debtor’s information.
If it has been discharged you’ll be able to see the date, and if you wish, you can get a copy of the discharge notice by ordering a download of the file. You are required to pay a small fee for this service as of publication, the fee is $0.10 per page according to the PACER website.
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Your Responsibilities When A Bankruptcy Order Is Made
- give the official receiver information on your finances
- give the official receiver a full list of your assets
- tell your trustee about any rise in income during your bankruptcy
- tell anyone who offers to loan you over £500 that youre bankrupt
- go to court to explain why you owe money if asked to do so
There are also things you cant do while bankrupt. These are called restrictions.
Reopening A Closed Chapter 7 Bankruptcy Case
Even the judge issuing a final decree in the case won’t necessarily spell the end. Sometimes it’s necessary to reopen the case. Most often this happens when the trustee, one of the creditors, or the debtor becomes aware of an asset that should have been included when the case was active. Your duty to cooperate with the trustee will continue if the case is reopened, but the court will not have the power to revoke your discharge more than a year after the case was closed.
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What If You Live Overseas
If you are living overseas you can still become bankrupt. Creditors that are not based in NZ will be sent a report if they are listed in your bankruptcy, but they can continue to chase you for any money you owe them.
Your assets in New Zealand become the property of the Official Assignee. If you have assets outside of NZ, the Official Assignee may have your NZ bankruptcy recognised in the overseas country and may deal with those assets also.
You can return to NZ during your bankruptcy, but if you want to leave again you will need to apply for permission.
The public register can be searched from overseas. Several credit reporting companies operate in more than one country so your credit rating outside of NZ may be affected.
Discharge And Your Debts
It is on discharge that you will be released from most debts that you incurred before the bankruptcy order.
The debts you are not freed from include:
- any money owed under family court proceedings for example, for maintenance or CSA payments or arising from any personal injury claims against you, unless the court directs otherwise
- any court fines or debts arising from fraud or certain other crimes
- debts you incur after the bankruptcy order
- since 13 April 2005, all outstanding student loans. If you were made bankrupt before 13 April 2005 you may still have to repay your student loan – clarification should be requested from the Official Receiver
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How A Bankruptcy Discharge Works
A bankruptcy discharge provides relief to a debtor, as it means they are no longer legally required to pay back debts that have been discharged. The subject of a bankruptcy discharge must meet certain requirements before it is granted, and the timing of the discharge varies based on the type of bankruptcy filed.
The court typically grants the discharge as soon as possible. Chapter 7 bankruptcies generally receive a discharge after about four months from the time the bankruptcy petition is filed, while a Chapter 13 bankruptcy discharge is issued after the debtor completes all payments under the plan. This is normally between three and five years.
An individual debtor under Chapter 7 bankruptcy is usually granted a discharge however, the right to a discharge is not guaranteed. For instance, there may be pending litigation involving objections to the discharge.
The Federal Rules of Bankruptcy Procedure provide for the clerk of the bankruptcy court to mail a copy of the order of discharge to all creditors, the U.S. trustee, the trustee in the case, and, if one exists, the trustees attorney. The debtor and the debtors attorney also receive copies of the discharge order.
The notice is simply a copy of the final order of discharge and is not specific to the debts the court determines should not be covered by the discharge. The notice informs creditors that the debts owed to them have been discharged and they should not attempt any further collection.
Your Chapter 7 Bankruptcy Case Does Not End When You Get Your Discharge It Ends With The Court’s Final Decree
Updated by Cara O’Neill, Attorney
For most filers, a Chapter 7 case will end when you receive your dischargethe order that forgives qualified debtabout four to six months after filing the bankruptcy paperwork. Although most cases close after that, your case might remain open longer if you have property that you can’t protect . During that time, you must cooperate with the trustee appointed to administer your case. Your case will close after the trustee sells the assets, pays out the funds, and files a report with the court.
You’ll find a complete overview of the bankruptcy process in What You Need to Know to File for Bankruptcy in 2021.
Talk To A Bankruptcy Lawyer
Need professional help? Start here.
How To See If A Bankruptcy Has Been Discharged
The process of federal bankruptcy involves a federal court dismissing a person or companys debts after it has gone through review of all assets left versus the debts declared by that filer. When the court is satisfied all that can be done to pay off debts has been attempted, then the remaining debts are discharged. This usually goes in the order of secured debt receiving any remaining monies first and unsecured debts being secondary. As a result, many unsecured debts without collateral are often dismissed without recovering anything in a bankruptcy proceeding.
As the paperwork and filings are made official and finalized, all the lenders declared are notified of the final process and included in the final decision. The are also included in the courts official files, which can be viewed by anyone visiting the court clerks office and requesting the file for review.
Looking Up a Case
To determine if a persons or business particular debt has been discharged, the first step is to get the name of the party. Ideally, one would also have the case number as well, but this is not possible. Therefore a name is key because it provides a distinct search term when a court clerks office has the ability to do an electronic search. Additionally, it helps to know the general time period the bankruptcy was processed, i.e. the month and year. This narrows down the search significantly since the federal courts deal with thousands of bankruptcies every year.
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