26 Jun Bankruptcy : Why Do I Need To Save My Papers?
You need your bankruptcy papers are a shield against future collection actions for discharged debt. The answer is asimple phrase: “zombie debt”. Zombie debt is the phenomenon of old and discharged debt being revived by debt buyers and debt collectors long after the debt has been rendered uncollectible. Check out Zombie Debt Haunts the Discharged and Zombie Debt.
Another reason: refinances or purchases of real estate. Many banks and mortgage underwriters do not understand bankruptcy. When they see a bankruptcy on a credit report, they want to see the bankruptcy schedules so they can determine which debts were discharged. Why? If your credit report reads the way it is supposed to read, this is unnecessary work, the credit report will reflect what was discharged. If it doesn’t, the mortgage underwriter really has no power to change the credit report, but they will be able to tell their employers that they have done their job. In a recent case in my office, a client had to request a copy of their petition 9 years and 10 months after a bankruptcy because their mortgage underwriter didn’t understand the bankruptcy process even though they had bought and sold two houses and refinanced their mortgages at least three different times.
You will also want the petition papers to make sure your credit report does read properly. Check out Credit Scores.