Discharge of your debts – that is the goal in Chapter 7. In Chapter 13, after successful completion of your payment plan, you get a discharge of the unpaid balance of unsecured debts, with some exceptions.
So, the court sends the discharge paper to the creditors, and they dutifully report same to the Credit Reporting Agencies, or CRAs, the main three being Experian, Equifax and Trans Union. Federal law entitles you to one free copy of your own report each year; which you can access at www.annualcreditreport.com. You should get one every four months, alternating through the agencies so you pay nothing for three reports a year.
The way I find out all is not as it should be is when my former bankruptcy clients contact me, in a panic, years after their discharge. Usually, they are about to close on a mortgage for refinancing or buying a house. They have just become aware that something is on their credit report that will cost them a higher interest rate or cause them to not qualify for a mortgage at all. They need it fixed in three days. The law seldom works that fast. So, they end up paying money they do not owe to avoid losing a favorable mortgage.
So, my practice is to send the big three CRAs copies of the bankruptcy notice and discharge before I close each file. This assures that there is proof that the CRAs have been advised of the bankruptcy information. They usually send a written acknowledgment, which I scan into my client’s file on my computer Now there is evidence, if needed later, that they knew. My client letter also repeats the above advice: stay on top of your credit report. You want these issues fixed before the closing is scheduled on your next mortgage.
The Fair Credit Reporting Act gives a free pass to the CRAs on reporting bad information. You have to send a dispute letter, and they have 30 days to respond, before you have any kind of legal claim against them for incorrect information on your report.
What if you filed years ago? Check that credit report. Find the mistakes, send the dispute letters. If the situation is not corrected, contact a BLN attorney. Actions can be taken to enforce your bankruptcy discharge.
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