What to Expect About Your Credit Report After Your Discharge

If you have gone through a Chapter 7 Bankruptcy, you should be looking forward to a fresh start, with most, if not all, of your debt discharged.  

As part of the discharge process, your former creditors have one main obligation, namely they are not allowed to try and collect the debts that were discharged in the Chapter 7 Bankruptcy. In short, the bankruptcy should mean an end to the debt that caused your financial problems. This also means that your credit report should reflect the fact that you no longer are obligated to pay the debts that were included in the bankruptcy. Unfortunately, many credit card companies, collectors, and credit reporting agencies refuse to abide by this rule and use continued credit reporting as a way to coerce payment on discharged debts.  Make no mistake, credit reporting is a form of debt collection and a violates the discharge order the reports relate to a debt that was discharged in your Chapter 7 bankruptcy.  

Common Problems With Discharge

Some creditors will continue to report their accounts with you, as if those accounts still had a balance that is still owed by you.  

Following your bankruptcy, each of the accounts that were included should change in two important ways. First, the balance of those accounts should reflect that the current balance due is Zero ($0.00).  The current balance field on the credit report is intended to inform the read the amount that is owed.  Because your debts were discharged through the bankruptcy process, that balance should be $0.00. Many creditors fail to “zero out” that balance and instead carry forward the balance that was due before the bankruptcy. So, instead of seeing a current balance of $0.00 (zero), your might see the former balance that was owed before your filed your Chapter 7 petition.

Second, credit reports include a field describing the status of the current status of your accounts.  Before the bankruptcy, you might expect that the status field would reflect that the account is in a late, collection, or charged off status. And after your bankruptcy, you should expect the status of each account to reflect that the account was included in your bankruptcy and discharged. This status is intended to reflect that you are not longer responsible for paying any balance on the account.  As with the balance, some creditors fail to change this field following the discharge, and instead show the late, collection, or charged off status of the account.  

If your credit report continues to show a balance due or a derogatory current status following your chapter 7 bankruptcy, your report is not accurate, and the creditor in question has effectively denied you the benefit of your fresh start. This kind of false payment history leaves the credit report looking as if you still owed these debts and have ignored your obligations to repay.

This information should be corrected, and you may be entitled to compensation or punitive damages from creditors and credit bureaus who have caused this problem for you.  

Fixing Your Credit Report After Bankruptcy

Continued reporting of discharged debt after the discharge order can keep you from the benefits of that new beginning and new credit. If your credit report has accounts that still show a balance or derogatory status after your bankruptcy case you should immediately contact your bankruptcy attorney.  

Your bankruptcy attorney should write a dispute to the credit bureaus for you, that will notify them of the problem. In turn, the credit reporting agencies who are carrying that false credit information are required to forward your dispute to the creditor who is still reporting the debt.  

If this dispute process does not correct the error, we can help you remove the inaccurate information and help to recover compensation for any harm. If you need discharged accounts from your bankruptcy removed from your credit reports and contact us now for a free consultation or call (248) 208-8864.