Posts Tagged ‘Bankruptcy Filing’

What should I do when I inherit something during or after my chapter 7 bankruptcy case?

How Will Filing for Bankruptcy Affect My Credit Score? By St. Charles Bankruptcy Attorney Tobias Licker

Filing for bankruptcy can provide relief by allowing you a fresh financial start. When you file for bankruptcy you will stop the harassing phone calls from creditors and debt collection agencies, you will be discharged of most or all of your debt and you may even be able to keep your home. However, filing for bankruptcy is not all good news.

One of the main concerns about filing for bankruptcy is how this financial decision may affect an individual’s credit score. When creditors, insurance agencies and potential landlords run credit checks, they are looking for information about how financially reliable you are. They want to know how likely you are to follow through on your future financial obligations. The credit score is one of the most important aspects and you may be surprised to learn that filing for bankruptcy can actually raise your credit score in some cases.

The first thing that you should know is that a bankruptcy filing will show up on your credit report. The record for a Chapter 13 bankruptcy filing can remain in your credit history for up to seven years, and a Chapter 7 bankruptcy filing record can remain for up to 10 years. The fact that the bankruptcy filing shows on your credit report does not mean that you will not be able to qualify for anything that requires an average credit score or better. Most of our clients qualify for a mortgage or car loan within one or two years after filing for bankruptcy. Many clients who did not qualify for a loan before filing, qualify right after filing for a car loan. The interest rate is in most cases better that it was before filing of bankruptcy.

If you file for bankruptcy with a relatively high credit score you may see a drop in your credit score at first. The effects of the bankruptcy will lessen as time passes, and you can work your way back up to a high credit score by reestablishing your credit.

On the other hand, your credit score may actually rise if you file for bankruptcy with a relatively low credit score. If your credit score is low due to unpaid debts, late payments and high balances you should see a rise in your credit score when you file for bankruptcy if the accounts are documented properly. The accounts that are included in the discharged debt should be recorded as being included in your Chapter 7 or Chapter 13 bankruptcy filing. When these accounts are documented properly your credit report should be almost completely wiped clean of late payments, delinquent accounts and other derogatory remarks. If these accounts are not documented correctly after you file for bankruptcy you should contact the offending creditors to request changes so that all of your accounts are properly documented. In the case your creditor does not respond, you can complain to the credit bureau directly which then will investigate and contact the creditor.

If you are living in the St. Louis Metro Area and have questions about filing bankruptcy please contact us for a free no-obligation consultation. One of our four bankruptcy attorneys can meet with you in person in one of our offices in St. Louis, St. Charles (O’ Fallon, St. Peters, Wentzville), Florissant (North County) or Granite City (St. Louis Metro East).

Do I Need to Include All My Creditors in My Bankruptcy?

Yes, you must include all of your creditors in your bankruptcy schedules. A creditor is defined in
the Bankruptcy Code as "an entity that has a claim against the debtor that arose at the time of
or before the order for relief concerning the debtor." This means that anyone you owe money to
at the time your bankruptcy is filed must be listed, including credit cards, car loans, mortgage
and even a friend or family member.
A concern many people have when filing bankruptcy is if they will be able to keep their
belongings. In most cases, a person will be able to keep everything including their house and
car. By not listing creditors, you will only be hurting yourself. If you do not list all your creditors,
then the creditor will have no way of knowing that you filed bankruptcy. The automatic stay will
never be enforced and they could continue to garnish your wages or pursue a judgment.
The Bankruptcy Code requires that all creditors be listed. At the meeting of creditors, the
Trustee will ask you under oath if you have listed all of your creditors and assets. By purposely
withholding creditors from the bankruptcy, you are committing a crime, perjury. If the trustee
discovers creditors were intentionally left off of your bankruptcy, they can deny or revoke your
discharge. If your discharge is denied or revoked you will be liable to pay all of your creditors,
including the ones that were listed on the bankruptcy. For this reason, it is important that all of
your debt is listed.
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