Your Credit Rights After Bankruptcy

Filing for bankruptcy is definitely not a spur of the moment decision.  A Chapter 7 filing is a large undertaking that involves much consideration and careful planning.  All of your debt is compared with your assets and you must decide whether or not you will be able to pay off what you owe and still be able to live on your salary before filing.

After determining that filing for bankruptcy is the best decision for you, you  can expect that all of your creditors will stop reaching out in an effort to collect your debt.  This relief in bankruptcy terms is referred to as the “automatic stay” where your creditors are prohibited from contacting you or going forward with any attempts to collect their bills immediately upon filing.  Following the stay is the bankruptcy discharge, where you are supposed to be permanently assured that your creditors will no longer be able to collect on your debts that were discharged.

Despite a discharge, many debtors find that creditors still continue to reach out and collect on the money owed.  These collection efforts can either be in the form of continued phone calls, on going reporting of debts on your credit report, calls from new third party creditors, etc.  Unfortunately, debt collectors are often well aware that they are violating your rights under the Fair Debt Collection Practices Act (FDCPA”) and the Fair Credit Reporting Act (“FCRA”) by attempting to collect on debt that has been included in a bankruptcy.  They just figure maybe they can just trick you into paying, and enhance their bottom line.

A discharge in bankruptcy is a final court order and any collector whose conduct violates this order can be punishable by law.  The FDCPA is clear that a collector may not attempt collection of a debt included in bankruptcy and violation of this statute may result in statutory damages and attorneys’s fees.  Likewise the FCRA prohibits collectors from reporting any debt included in bankruptcy with a balance or past due amount. Bankruptcy discharge means all accounts can still be on your credit file but must be reported with a zero balance and no negative credit history outside of an “Included in Bankruptcy” notation.

In addition, once that obligation to the creditor has ceased, so too is their permission to gain access to your credit file.  Unless you apply for credit or have a current open account with a creditor, they are not allowed to access your credit file.  Yet despite their knowing that they should not be accessing the credit file of a consumer who has discharged their debts, many creditors still check the credit of their discharged debtors to see if there is still a propensity of the consumer to pay the discharged debt.

If you believe your rights may have been violated under the FDCPA or the FCRA and would like the advice or assistance or counsel, contact SmithMarco P.C. for a completely free case review.

Larry Smith

One comment

  1. Very helpful, my Chapter 7 has been discharged. Viewing my credit reports, states this discharge, also shows the creditors along with the negative payment history. This is no clean slate, recently denied an apartment, once all was viewed.

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