Five Things The Bankruptcy Court Wont Tell You
1. Bankruptcy Can Actually Improve Your Credit Score
Most “credit experts” say that filing bankruptcy is the worst thing you can do to a person’s credit score. Unfortunately, most people considering bankruptcy have already wrecked their credit scores. Bankruptcy will stop the negative reporting and allow your credit score to heal over time. Late payments are replaced by a “discharged in bankruptcy” entry on your report, and outstanding debts are reported as zero balances. In some extreme cases, a credit score may improve significantly after the bankruptcy discharge is entered.
2. The Bankruptcy Court Doesn’t Report To Credit Bureaus
While one of the chief benefits of bankruptcy is a “fresh start,” the bankruptcy court does not report your bankruptcy discharge to the credit bureaus. It is up to you to ensure that your credit report is accurate and up to date. The best advice is to request a completely free credit report from Transunion, Experian, and Equifax at https://www.annualcreditreport.com. Get these free reports after your discharge and dispute erroneous information contained in your files.
3. Don’t Stop Paying Your Bills Just Because You Didn’t Receive A Monthly Statement
The automatic stay stops all creditor collection action. None of your creditors are allowed to send your monthly statements after your bankruptcy is filed – even those you intend to continue paying. Consequently, it is up to you to keep track of those debts you need to pay, such as a car or house payment. “I didn’t get a bill” is not a legal excuse for nonpayment.
4. You Are At A Disadvantage Without An Attorney
The bankruptcy court will not tell you that you are better off with an attorney. The bankruptcy laws are complicated, even for seasoned attorneys, so common sense should tell you to hire counsel. Additionally, without an attorney representing the accuracy of the bankruptcy petition and schedules, the bankruptcy trustee will scrutinize your case and will presume that you have made errors. While licensed attorneys will receive email updates concerning the case, you will receive notice through the mail and will not be able to file responses electronically. This is not only inconvenient, it will also cause you delay and additional expense.
5. You Can Keep Assets That Are Of No Value To The Bankruptcy Estate
The Chapter 7 bankruptcy trustee is charged with finding assets that can be taken and sold to pay your creditors. However, certain assets have little or no practical value. For instance, if you have a horse that is worth $300, the trustee must consider the costs involved in taking and selling the horse. That means hiring outside help and paying for expenses. The trustee could end up owing money! In these situations the bankruptcy trustee will “abandon” the estate’s interest in an item that has little or no value to creditors.
In the bankruptcy world, what you don’t know CAN hurt you. Get the facts about bankruptcy from an experienced bankruptcy attorney and protect your financial interests.