Credit Repair

Bankruptcy On Your Credit Report – 5 Things You Must Know

If there is bankruptcy on your credit report, you are into trouble. Though it is true that bankruptcy is a legal remedy for those who are neck deep in debts to get rid of their debt problems and get a chance to start heir financial life afresh, it is also important that the journey of financial recovery after getting bankrupt is not an easy one. This is one of the worst negative items that can appear on a credit report, as it stays there for a period of seven to ten years. You end up having a negative credit score, which means you can no more qualify for loans or credit cards. You may even have to face great difficulty in getting an apartment on rent with bad credit. It can even affect your employment opportunity. However, there are ways to improve your situation, but it is a difficult process and takes time. You will have to work on the right strategies and show some great financial discipline in order to bring your finances back on track. Following is a brief rundown on some of the very basic things that you must be aware of in this regard.

There Are Things You Can Do To Improve Your Credit Worthiness

When it comes to dealing with issues related to bankruptcy on your credit report, the first thing that is very important for you to understand that just because you are bankrupt, it does not mean that you have no financial life for the next seven to ten years. You cannot just sit back for that long a period and wait for the negative items to be removed from your credit report. Though you can do nothing to remove bankruptcy from your report, you can work on to improve your situation elsewhere. For example, you can obtain a secured credit card and start making the monthly payments in full every month. This strategy always works and you will notice a significant increase in your credit score within a period of six months. Even though you are bankrupt, you can easily qualify for a secured credit card at a very low rate. As part of the process, you have to deposit a certain amount of money to the credit card company; the amount of deposit becomes the maximum limit on that card. It means you cannot spend more than what you have already deposited. This way, a secured card allows you to use the convenience of credit card and also a wonderful opportunity to repair your credit.

Filing Date

You may also have certain misconceptions about bankruptcy on your credit report. For example, a common misconception is that the entries related to bankruptcy appear on the credit report of the debtor on a date when the court grants bankruptcy to him or her, which is not true. In reality, bankruptcy appears on your report right from the date when you file your petition in the court. Therefore, if you are trying to determine the period of time when those entries will be removed from the report, you must do your calculations on the basis of the filing date, not on the basis of the date when you became officially bankrupt.

Proper Reporting

The impact of bankruptcy on your credit report may vary depending upon how the various aspects associated with bankruptcy filing have been handled. Inaccurate bankruptcy reporting can cause more damage to your report. Therefore, you must do a thorough review of the report to make sure everything has been reported accurately and that the information reported out there is complete in all sense. You have the right to file a dispute with the credit bureaus if you find any inaccurate information related to your bankruptcy.

Type Of Bankruptcy

The impact of bankruptcy on your credit report also varies depending upon whether you file your petition under chapter 7 or chapter 13 of the bankruptcy code. In case of chapter 7, the negative entries are likely to remain on your report for a period of ten years, but if you have filed the petition under chapter 13, the negative entries are very much likely to stay on your report for a period of seven years only.

Exceptions

Last, but not the least, it is also important for you to keep in mind that there can be certain exceptions also. There can be situations when the negative entries are removed from the report much before the seven year period has passed.

Overall, the more informed you are about the various aspects associated with bankruptcy on your credit report, the better decision you will be able to make on how to plan your financial affairs to improve your credit worthiness after becoming officially bankrupt.


Custom Search

Tags: ,
Posted in Credit Repair, Credit Reports | 1 Comment »

One Response to “Bankruptcy On Your Credit Report – 5 Things You Must Know”

  1. Ritchie says:

    Bankruptcy can be taken as the last option to get rid of your multiple debts and you can give fresh start to your financial life. But, Bankruptcy is very complex process, the whole procedure has to be completed very carefully, every step should be taken according to your bankruptcy attorney’s advice. Bankruptcy can ruin your credit report completely; it will be a long way to cover for repairing your credit report after being bankrupt. When there is no other option left then you have to go for bankruptcy but there are some steps which can be taken to improve your credit report after suffering from bankruptcy. First of all you should try to get a secured credit card, it can be taken by depositing the certain amount of money and you will get the credit card of maximum limit of that much money. Now, you can use this credit card and pay full payments in time and your score will get a positive start. Bankruptcy filing is a very complicated process and it should be done very carefully. If you find something wrong in your bankruptcy you can file a dispute with the credit bureau. It also affect your case under which chapter you are filing your bankruptcy either chapter 7 or chapter 13.

Leave a Reply

You must be logged in to post a comment.