Life After Bankruptcy Is Not As Horrible As You Might Think

Sunday, June 21, 2009, AM | Leave Comment

Bankruptcy is not the way to live and eventually die if there is any chance at all of avoiding it. But if you have exhausted all venues to avoid going that route and if there is no other way out, it is not the end of the world for you.

There is life after bankruptcy.

However, you went to court and you had a successful bankruptcy. Regarding your credit history, bankruptcy will still be on your record for some time.

Bankruptcy has eliminated the liability for most of your debt you had accumulated over the years. However, the creditors still have the right to continue reporting your past account activity on your credit report.

Your score, obviously, went from good to bad. The bad score will remain on your credit report for seven years from the date that the first negative report was filed in your name.

There are different financial events and occurrences that you should be aware of regarding bankruptcy and they are:

  • Late payment

    Late payment is a major part (35%) of FICO credit score.

  • Collection accounts

    Some experts recommend: “Why payoff collection accounts when you have a bona-fide – without intention to deceive – chance in getting the collection deleted by disputing it with the credit bureaus that are reporting it, as per “The Fair Credit Reporting Act”.

    The original creditor already wrote it off as a loss on their taxes anyway and in most cases sold the debt to a collection agency for 15 to 20 cents on the dollar.”

  • Charged-off accounts

    charged-off accounts can remain on your report for seven years from the initial missed payment.

  • Judgments remain

    Judgments remain for seven years from the date the judgment is filed.

  • Tax liens

    City, county, state and federal tax liens remain for seven years from the paid date of the lien. Unpaid liens remain for 15 years from the date the lien is filed.

  • Bankruptcy

    Bankruptcy will remain on your credit report for 10 years from the date of filing.

In a Nutshell
Because of bankruptcy, you have to start all over again. To avoid bankruptcy in future, be very careful and always send for your free annual credit report.

If you find any discrepancy, call or write to the credit bureaus that are reporting it and explain why you believe it’s a mistake.

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