How Do I Handle Bankruptcy on My Credit Report?

There are two key ways that you need to handle bankruptcies on your credit report. Both of these involve tackling the bankruptcy head on instead of attempting to hide from it. One silver lining in a bankruptcy is that it erases your delinquent and outstanding account balances.

Your credit report will display $0 balances on any accounts that were successfully discharged via the bankruptcy. 

First Action – Check Your Credit Report

The first action is to ensure that your credit report correctly reflects these effects of your bankruptcy. Sometimes creditors will stubbornly keep reporting the negative account information even after your bankruptcy discharge. This is why you need to routinely check out your credit report. 

You can use a free third party credit report/score service like Credit Karma or Discover It to do this as often as you like. Checking it at least once a month in this situation is a good idea. 

It will not cause you any hard credit inquiries.

Should you find out that one or more of your creditors are showing discharged debts as active (with balances outstanding), then you need to talk with the appropriate credit reporting bureau right away. A more proactive approach is to send every agency copies of your discharge as soon as you receive it. This will alert them to the fact that they are not to report additional information on all included accounts. 

When you do come across reporting errors, you are within your rights to send out disputes to the three credit bureaus. They must address them within 30 to 45 days.

Second Action – Check Your Non-Discharged Accounts

The second action to take is to continue paying all of your non-discharged accounts on time. Not every one of your accounts will fall under the discharge order. Student loans are one prime example that can not be discharged. These active accounts will keep affecting your credit score, so be sure to pay all existing accounts and loans in a timely fashion. 

Just because an account does not yet show on your credit report is not a good reason to ignore it. Should you fall behind on payments, the accounts will be reported to the bureaus and appear tragically as if by magic. Your overarching goal is to let creditors see that your financial problems are in the past. 

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