Jun 282012

So, you’ve made it through your  bankruptcy.  What’s the one thing you should do first after bankruptcy discharge? I mean, aside from the obvious things, like continuing to make the payments on the car or the house you’re keeping.

For starters, enjoy your newfound liberation after bankruptcy discharge for at least a couple of months. It was stressful.  Then, re-run your credit report. You might have run a report when you were getting ready to file bankruptcy. Sooo… why would you do it again?

To make sure lenders are sticking to the rules.  Discharge of your debts in bankruptcy means your former creditors are not allowed to continue trying to collect money from you.  If a creditor continues to report a debt on your credit report as owed or past due, it’s breaking the rules.  It’s violating the discharge.  It is possible to go back into bankruptcy court and ask the judge to punish the creditor with sanctions.

A surprising number of creditors violate the discharge after bankruptcy. Why? Here are a couple of educated guesses.  First, it may be a simple mistake.   A large institution, several departments, one doesn’t communicate correctly with the other, and BAM! No one pushes the button that stops the creditor from reporting.  Sometimes, though, it’s more sinister.  A creditor may have enough history to know they have a high risk of violating the discharge after bankruptcy, yet they haven’t put in safeguards to ensure it doesn’t happen more, and more often.

Why would they be so reckless? It may be as simple as playing the odds.  They know they’re unlikely to get caught, and that many people will assume that if the creditor is reporting the debt, it must be okay for them to do so.  It is NOT okay (unless you reaffirmed the debt. You’d know whether you have reaffirmed a debt.) Some others take a calculated risk that the sanctions they’ll end up paying pale in comparison to the amount of money they stand to collect by the improper reporting.  For these creditors, it’s strictly a bottom line business decision.

There is no government agency or regulatory body to police creditors to ensure they’re doing the right thing reporting debt.  It will probably surprise you to know that there is actually a market for the sale of debt discharged in bankruptcy.  Yep, someone out there is prepared to pay for the opportunity to try and collect debt that’s been discharged in bankruptcy!  Go figure.

The only way to discover it is to regularly run your credit report.  I recommend quarterly for the first year after your bankruptcy case ends, then annually after that. There are several resources available to you.  If you haven’t already used your one annual free report, you can run your report for free at: http://www.annualcreditreport.com.   This is a site the FTC requires the Big Three credit reporting agencies to maintain for consumers.  As the name suggests, you can get your report for free, annually.  There are, of course, for-fee services charging a variety of rates and offering a lot of different options.  All of these that I know of require their customer to give a credit card account to which the fee may be charged. Shop carefully. Don’t buy more service than you need.

  5 Responses to “The first thing to do after bankruptcy discharge”

  1. Once you are bankruptcy discharged, the very first thing to do is to make important decision regarding your financial investments and keep a check on the amount you spent. Analyzing the financial investment is the best way to gain financial stability.

  2. Great information Mr. Staley! You continue to be the caring professional who helped us through one of the most difficult times in our lives! Please keep up the great work!

  3. thank you so much,you made the job easy

  4. My chapter 7 bankruptcy was discharged in December 2012. I’m trying to apply for the credit card you pay into and pay off in order to build up your credit. Each time I try I’m denied because all of my creditors are still on the list of creditors I still owe. I called one of the credit bureau’s and she told me I have to contact each and every creditor on my bankruptcy and ask them to remove it from the credit bureau list. I owed a lot of creditors and have only a cell phone with about 450 minutes. Is this really what I am supposed to do? Nobody ever told me that before today. Thank you so much. The only way to alternatively contact me is by my email listed above. Thanks you for your help.

  5. I did my own bankruptcy in the past. I think I did a great job. I purchased three books on how to file your own bankruptcy. I systematically created my course of action. One of the things I did was to send a generic letter to all creditors directing a cease and desist. I registered the letters and requested a return receipt. I did not have any problems.

    This may help.


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