After filing bankruptcy, it’s a good idea to check your credit report and follow these 3 steps to fix errors on your credit report, especially in how your discharged debts are listed.
The fact that you filed for bankruptcy can be reported for up to ten years. Likewise, other public record items, such as judgments can still appear.
However, while it may seem like negative information, the reporting of your bankruptcy discharge might actually be a very good thing!! A bankruptcy discharge can “clean up” debts that used to show up on your credit report as being delinquent. That is because debts that were discharged can no longer be reported as being unpaid or in a past due status.
Each of the 3 major credit report agencies should report each discharged debts as “having a zero balance” and “included in bankruptcy,” or similar language. They are NOT allowed to report that a discharged debt is currently owed or active. They also cannot report that it is late or outstanding, charged off, has a balance due, or has been converted to a new type of debt (re-aged, or having new account numbers, for example).
Order your free copy of your credit reports from all 3 major credit reporting agencies. You can do this online at annualcreditreport.com or calling 1-877-322-8228. This will show how your credit is being reported and whether there are errors to be fixed.
Tell the credit reporting agency what information is incorrect. This can be done by filing a “dispute” and can be done online, or through a letter. You can find a sample dispute letter here. Include copies (NOT originals) of documents that support your position, such as copies of your bankruptcy papers showing it was filed and that the debt in question was listed. You may want to enclose a copy of your report with the items in dispute circled. Send letter by certified mail, return receipt requested. Keep copies of your letter and any enclosures.
Make sure your credit report is now accurate. The credit reporting agency or agencies may send you confirmation of this, or you may need to order new credit reports on your own.
A Related Note:
Some people wonder why debts they are continuing to pay on, such as a car loan or a mortgage are not being currently reported on their credit report. The reason for this may be that you did not “reaffirm” the debt. Reaffirming is a formal agreement filed with the court, obligating you to continue paying the debt for the entire, full term, or be liable for the difference if the item is given back, surrendered, or foreclosed on. This is the reason it is usually advisable to NOT reaffirm a debt, especially one you are not sure whether you will keep in the future, or a mortgage, which has an extremely long payment term.