Major credit reporting agencies usually remove bankruptcy after seven years for Chapter 13 debtors so remember rebuilding credit takes time. Wage earners who have faithfully complied with court-ordered repayment plans can be sure that bad credit reports won’t stop efforts to seek employment or re-establish buying power.
After Bankruptcy, Rebuilding Credit Takes Time
A Chapter 13 proceeding automatically vanishes from the debtor’s report seven years from the date of filing, as if it never existed. The formerly bankrupt consumer is can apply for future financing without fear of disclosure of the previous proceeding.
If reporting agencies fail to remove bankruptcy after seven years, debtors have legal recourse. Contact the three major agencies for free credit reports. Review all entries and check to be sure that bad accounts which should have fallen off of the report are still listed.
Anyone who has paid creditors for three to five years through a bankruptcy Chapter 13 repayment plan has been released from further financial liability and will also be able to build credit scores back up after bankruptcy.
Filing Chapter 13 bankruptcy has its negative connotations, but debtors have the opportunity to start over due to efforts to honor responsibility to creditors. Many Chapter 13 debtors live on a strict budget for several years in order to make monthly payments and change their living standards.
A Chapter 13 is discharged when the last payment has been made and debtors can certify participation in an approved financial management course provided by a reputable consumer financial counseling agency.
When credit reporting agencies remove Chapter 13 bankruptcy, credit scores after bankruptcy usually rise. Prospective lenders see an individual’s score and determine whether it’s credit-worthy. Scores above 600 indicate financial stability and a good history of repayment. Removing incorrect information and establishing consistent payment history will boost scores immediately.
Debtors should closely monitor reports after seven years have lapsed to ensure that reporting agencies have removed Chapter 13 discharges. And don’t try to work with companies promising to remove insolvency before seven years for a fee; these kinds of offers are illegal.
Call the credit agency that is showing negative entries and request that the Chapter 13 and all of its accompanying debts and judgments be expunged from data banks and reports. While one call should do the trick, if it is necessary to make repeated calls, do so. Don’t be lazy. Check to ensure that the paperwork has been completed. It’s your future financial reputation, which negatively or positively impacts consumer scores, is at stake.
Lanigan and Lanigan Answer Your Financial Questions
Eric and Roddy Lanigan, Winter Park foreclosure and bankruptcy attorneys will share financial and economic information that will help to rebuild credit after bankruptcy. You will also be able to receive counseling before and after filing a Chapter 13 bankruptcy.
