Credit Repair and Bankruptcy

Credit Repair and Bankruptcy

I received a phone call from a young lady today that had a question regarding credit repair and bankruptcy. Now I had spoken with this young lady in the past regarding her situation and after weighing the pros and cons she decided to do a chapter 7 bankruptcy.

Her decision was in large due to the amount of debt or the balances that she had and the fact that here debts were fairly recent. My personal feeling was that she made the right decision based on her financial goals and we could always follow up in the end with the credit repair.

Credit Repair and Bankruptcy go Hand in Hand

The reason I say this is because in my past years of experience as a loan officer one thing I would see on credit reports time and again was clients that had gone through a bankruptcy showing accounts that were not reporting accurately. In other words they still showed a collection or charge-off status or an open balance after being discharged.

One thing that consumers do not realize is that you are hiring your attorney to help you with the bankruptcy, not fix your credit. This is where credit repair and bankruptcy come together. You see once your bankruptcy is discharged now you have to work to make sure that your credit report is accurate.

A good credit repair company will help you in challenging all the accounts on the credit report that were included in the bankruptcy including the bankruptcy itself. If the information that’s reported is NOT verifiable per the Fair Credit Reporting Act these accounts most be deleted, and that again, includes the BK.

Now on the other hand if they are verifiable than they will need to be updated to show that they were included in the bankruptcy. Either one of these outcomes will help you start down the path of rebuilding your credit.

The important part is that you are responsible for assuring the accuracy of your credit report following the completion of the BK so it’s important that follow through and don’t think your job is done after the discharge. This is the why and how credit repair and bankruptcy go hand in hand.

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Originally posted 2014-03-25 18:24:25.