After getting your bankruptcy discharge you need to prepare to tackle the task of making sure that credit entries in your credit report are not still showing delinquent accounts. Anything that should have been included in bankruptcy needs to be labeled as such. About 3 months after your bankruptcy discharge you need to take a close look at your credit report and fix any erroneous entries. These can cause trouble for you down the road qualifying for credit, loans, jobs etc.

You’ll be able to get your credit report from all three credit bureaus by visiting Annual Credit Report, everyone is entitled to a free credit report per year. When you get your report you are very likely to find accounts that have not been cleared after filing bankruptcy. It’s common for creditors not to bother to make these updates especially since they’re not getting paid, they’re certainly not interested in doing any favors. However, you must correct these errors yourself.

Repairing your credit report after filing bankruptcy

Ideally you’d want to wait from 3 to 6 months to get your credit reports and start spotting anything that should have been included in bankruptcy. If you find that accounts that should now be closed are still open and delinquent, then what you need to do is make a copy of your bankruptcy schedules and discharge documents and start a dispute with the credit reporting agencies (Transunion, Equifax and Experian). Your discharge papers are the key to get this resolved. This can also take sometime since the verification process is slow.

Hiring credit repair services will work better for anybody, it’s definitely a good option, just be ready to provide your bankruptcy documentation. Credit repair agencies are more effective at doing this, however you must take care to hire only a legitimate credit agency for this industry is filled with scams.

Bounce right back after bankruptcy

Repairing your credit is only one aspect of getting your financial life back on track. You have to now work a little harder to convince creditors that you’re still worthy of getting credit. Even after you get your credit entries corrected, you should know that your bankruptcy file will remain on your credit report for up to 10 years, however that big dark cloud can being to dissolve with positive credit entries that you should be striving to achieve.

There are several ways to regain control of your credit after filing bankruptcy, depending on what you want to accomplish, be it a mortgage, auto loan or a credit card. Your credit report must accurately report your financial history for you to begin rebuilding. Once you do that there many programs that offer bankruptcy credit cards, personal loans and mortgage loans after bankruptcy. Read the post on Getting a mortgage after bankruptcy for more info.

You need to know what debts are discharged under bankruptcy, this is particularly relative to bankruptcy chapter 7 filings, where you can basically get all your “unsecured” debts discharged at no further obligations to you, but it’s only these unsecured debts that get discharged. Then of course there are the “secured” debts, which you still need to worry about. So to be perfectly clear about this “Not all debts are discharged when you file for bankruptcy“.

If you had already defaulted on your debts prior to filing bankruptcy, it’s probable that your creditors sold your debts to collections agencies prior to you filing bankruptcy, who can then come after you for that debt plus additional fees. When you get a bankruptcy discharged, you need to make sure that you keep your discharge papers handy at all times. Make several copies of them and keep them ready to mail to whoever needs to see them for you to prove that you did in fact file bankruptcy and were your unsecured debts discharged.

When a collections agency contacts you about debt that was discharged in bankruptcy, you don’t necessarily want to ignore the call or letter, you need to let them know that the debt they’re seeking repayment for was discharged in bankruptcy and you need to provide them with the correct paperwork of your bankruptcy discharge to prove this. If they continue to pursue this even after you provide the documentation, and they will sometimes push it, then you must contact the bankruptcy attorney that represented you and make them aware of it, they will know just what to do about it. If you filed bankruptcy alone, then try first contacting the courthouse where you filed your petition and bring it to their attention.

Collecting discharged debts goes against the order by a federal court that you have no further obligation to this debt, but collections agencies sometimes push this in hopes that you won’t know any better or that you will simply give in and just start paying again. Once you threaten to take legal action against them they will back off since it can cost them money to fight a case they can not win.

On the flip side of that coin, if you ignore secured debts after your bankruptcy discharge, you are not only going to get chased by collections agencies, but you are causing further damage to your credit since collections accounts normally get recorded in your credit history.

Some of the debts that are considered secured debts are student loans, mortgage leans on your home, car payments, federal and state taxes and basically anything else that has some kind of collateral to it. However certain items that you buy with consumer accounts like those you get from a furniture store or department store where you might make large purchases, need to be clearly defined in your bankruptcy file as either exempt items or assets that can be liquidated. If they were marked as exempt, then they can not be taken back, though again they will try.

You must continue to pay for your secured debt or surrender the collateral, such as the car or home attached to the lean. When it comes to student loans and taxes, there are no actual collaterals for these debts, they are just obligations that you must take care of. The federal government in particular, does not need an external collections agency to collect taxes you may owe. The IRS will start by contacting you via mail about your debt, you need to act immediately and establish a repayment schedule, otherwise they can levy any assets you may have and/or you may even be sent to jail for not paying your taxes.

Do not ignore the warnings, if it’s unsecured debt, provide the appropriate proof of discharge and consult a your bankruptcy attorney. If it’s secured debt then continue paying it or surrender the asset.

You may feel the relief after your case is discharged, but things will be hard after bankruptcy. It’s going to be a little difficult at first to feel good about this fresh new start because of the difficulties you must now face for your lack of good credit. Expect most creditors to not want to deal with you without imposing special terms in which you must provide a money deposits or pay higher interest rates.

It is possible to get loans and credit after bankruptcy. These are bankruptcy loans and their purpose is to help you get back on your feet and reestablish a positive financial record. For you to qualify for this benefit you must already have a bankruptcy discharge and/or debts must be either dismissed or satisfied.

Remember that if you are successful at getting loans or credit after bankruptcy, you will not be able to get any more protection if you default again. You can only file bankruptcy once every ten years. So there will be nothing anyone will be able to do for you if you mess this up again.

You can also expect your bankruptcy record to remain in your credit for at least the next 10 years. So even when you begin to vigorously rebuild your credit, you will be fighting against that fact.

Once you have a bankruptcy discharge, it is also very important to focus on the decisions you make from now on. You will be contacted from time to time, by agencies that specialize in credit repair. This often sounds like a good idea after bankruptcy, however, you need to consider this very carefully, because credit repair will not apply to everyone, even if they make it seem like it does. There are credit counselors and credit repair agencies that can help in certain conditions, but there are too many that aren’t worth trying.

The same thing goes for lenders and car dealers who offer you discount rates and special offers and tell you that your bankruptcy does not matter. They often target people who have filed for bankruptcy chapter 7 since they typically have to surrender assets like homes and cars for liquidation, so you MUST read their rates and terms carefully if you find the need to use their services.

Bankruptcy law protects you and affords you a new chance to start again, but it does nothing for you in terms of qualifying for credit again, so it is solely up to you to get up to a good start with your new financial life. Expect to be denied a lot and that can actually be a good thing, if filing bankruptcy did not get rid of your bad spending habits then being denied credit should help.