These days, the contents of your credit report can affect your quality of life – from whether you can rent a flat, find a job, or obtain financing for a car, home, or personal loan. With your credit score representing you so often, it’s important to know how to read your credit report, and spot [...]
FAQs About Bankruptcy
- What is a bankruptcy?
- What happens after a bankruptcy is filed?
- How does a bankruptcy affect my credit report?
- What can I do if a debt that was discharged in bankruptcy is still listed on my report as due?
- My bankruptcy has been discharged, but my credit report does not reflect this. What should I do?
A bankruptcy is filed by a debtor when his debts become so great that he cannot possibly pay them back. This is generally something that is decided by the individual. Filing for bankruptcy is essentially giving your creditors notice that you will not be able to pay them back.
After a debtor files bankruptcy, they will have to await the court’s decision as to whether their debts really can be “wiped clean.” The debtor’s finances will be examined to assure that they cannot reasonably pay back the money they owe. If it is found that they cannot repay their debts, the debts with be discharged, meaning the debtor is no longer responsible to pay the debt back. It can take up to twelve months between the time a bankruptcy is filed and the time a discharge is granted.
A bankruptcy will stay on your credit report for six years from the time it was filed. A bankruptcy generally makes lenders wary, as they may think that you will not pay them back for the loan. While it may act as a negative on your report, a bankruptcy does not mean that you cannot receive a line of credit. Approval is up to the individual lender.
You will need to write the lender a letter and enclose a copy of your bankruptcy documents that prove that the account in question was, in fact, included in your bankruptcy. Be sure to include official and complete proof.
You will need to send a copy of your discharge notice to all three credit reference agencies. The agencies will update your report as soon as they receive a valid discharge notice.