Chapter 7 Bankruptcy Early Removal, etc Hey Ya'll, First let me say I am thankful this forum is available so I can openly discuss my questions and concerns about my credit isses with others who have experienced the same. Mar 17, · Bankruptcies fall off personal credit reports after 10 years, after which time a damaged credit score can begin to improve. There's no way to determine exactly how much your credit score will improve after bankruptcy, because it depends entirely on . For a Chapter 7 bankruptcy, the event will remain listed on the report for up to 10 years after it was originally filed. For a Chapter 13 bankruptcy, it will remain on the report for up to seven years. The bankruptcy event should automatically be removed from the report by the reporting bureaus at the end of this period of time, and the.
It took me quite a while to find a new job. The bills just kept piling up. It got to the point that I was no longer able to make my payments, not even the minimums. All of my credit card accounts were charged-off and sent to collection agencies. My life became a nightmare of collection calls and endless harassment from debt collectors. It was a tough decision for me, but I decided to file bankruptcy. Although the bankruptcy had relieved me of the debt, the damage to my credit was already done.
I knew I had to do something about my credit. I tried to apply for new loans to show them that I was creditworthy, but every single bank denied me. Getting turned down for loans over and over again was frustrating and embarrassing. A friend told me about Lexington Law Firm and was ranting and raving about how awesome they were. I was skeptical at first, but after seeing what they did for him, I knew I had to give them a try. I called 1 and was connected to a credit professional who was very friendly and understanding.
She was also exceptionally knowledgeable. I asked her many questions about the negative items on my credit report and told her about my situation. After about 10 minutes of talking with her, I decided to sign up. About 3 weeks later, I started receiving letters from the credit bureaus informing me that negative accounts had been removed from my credit reports! See below. In total, they removed over 9 million negative items for the year. So if you have other negative items plaguing your credit in addition to a bankruptcy, this credit repair company is your go-to resource to get those items successfully removed.
Those creditors are required to adjust their reporting of your discharged accounts, but many fail to do so. After repairing my credit, I was finally able to purchase my first home at a great interest rate.
I am now able to get any loan or credit card that I desire. My credit scores have improved significantly:. I would sincerely say that your organization conducted business in the utmost professional manner. I am extremely pleased with the way you worked things out for me. Thanks for the wonderful service. A creditor in a chapter 7 case who has a lien on the debtor's property should consult an attorney for advice.
Commencement of a bankruptcy case creates an "estate. It consists of all legal or equitable interests of the debtor in property as of the commencement of the case, including property owned or held by another person if the debtor has an interest in the property. Generally speaking, the debtor's creditors are paid from nonexempt property of the estate. The primary role of a chapter 7 trustee in an asset case is to liquidate the debtor's nonexempt assets in a manner that maximizes the return to the debtor's unsecured creditors.
The trustee accomplishes this by selling the debtor's property if it is free and clear of liens as long as the property is not exempt or if it is worth more than any security interest or lien attached to the property and any exemption that the debtor holds in the property. The trustee may also attempt to recover money or property under the trustee's "avoiding powers.
In addition, if the debtor is a business, the bankruptcy court may authorize the trustee to operate the business for a limited period of time, if such operation will benefit creditors and enhance the liquidation of the estate. Section of the Bankruptcy Code governs the distribution of the property of the estate. The debtor is only paid if all other classes of claims have been paid in full. Accordingly, the debtor is not particularly interested in the trustee's disposition of the estate assets, except with respect to the payment of those debts which for some reason are not dischargeable in the bankruptcy case.
The individual debtor's primary concerns in a chapter 7 case are to retain exempt property and to receive a discharge that covers as many debts as possible. A discharge releases individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor. Because a chapter 7 discharge is subject to many exceptions, debtors should consult competent legal counsel before filing to discuss the scope of the discharge.
Generally, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of chapter 7 cases. In most cases, unless a party in interest files a complaint objecting to the discharge or a motion to extend the time to object, the bankruptcy court will issue a discharge order relatively early in the case — generally, 60 to 90 days after the date first set for the meeting of creditors.
The grounds for denying an individual debtor a discharge in a chapter 7 case are narrow and are construed against the moving party. Among other reasons, the court may deny the debtor a discharge if it finds that the debtor: failed to keep or produce adequate books or financial records; failed to explain satisfactorily any loss of assets; committed a bankruptcy crime such as perjury; failed to obey a lawful order of the bankruptcy court; fraudulently transferred, concealed, or destroyed property that would have become property of the estate; or failed to complete an approved instructional course concerning financial management.
Secured creditors may retain some rights to seize property securing an underlying debt even after a discharge is granted. Depending on individual circumstances, if a debtor wishes to keep certain secured property such as an automobile , he or she may decide to "reaffirm" the debt.
A reaffirmation is an agreement between the debtor and the creditor that the debtor will remain liable and will pay all or a portion of the money owed, even though the debt would otherwise be discharged in the bankruptcy. In return, the creditor promises that it will not repossess or take back the automobile or other property so long as the debtor continues to pay the debt. If the debtor decides to reaffirm a debt, he or she must do so before the discharge is entered. The debtor must sign a written reaffirmation agreement and file it with the court.
The Bankruptcy Code requires that reaffirmation agreements contain an extensive set of disclosures described in 11 U. Among other things, the disclosures must advise the debtor of the amount of the debt being reaffirmed and how it is calculated and that reaffirmation means that the debtor's personal liability for that debt will not be discharged in the bankruptcy.
The disclosures also require the debtor to sign and file a statement of his or her current income and expenses which shows that the balance of income paying expenses is sufficient to pay the reaffirmed debt.
If the balance is not enough to pay the debt to be reaffirmed, there is a presumption of undue hardship, and the court may decide not to approve the reaffirmation agreement. Unless the debtor is represented by an attorney, the bankruptcy judge must approve the reaffirmation agreement.
If the debtor was represented by an attorney in connection with the reaffirmation agreement, the attorney must certify in writing that he or she advised the debtor of the legal effect and consequences of the agreement, including a default under the agreement. The attorney must also certify that the debtor was fully informed and voluntarily made the agreement and that reaffirmation of the debt will not create an undue hardship for the debtor or the debtor's dependants.
The Bankruptcy Code requires a reaffirmation hearing if the debtor has not been represented by an attorney during the negotiating of the agreement, or if the court disapproves the reaffirmation agreement.
The debtor may repay any debt voluntarily, however, whether or not a reaffirmation agreement exists. An individual receives a discharge for most of his or her debts in a chapter 7 bankruptcy case.
A creditor may no longer initiate or continue any legal or other action against the debtor to collect a discharged debt. But not all of an individual's debts are discharged in chapter 7. Debts not discharged include debts for alimony and child support, certain taxes, debts for certain educational benefit overpayments or loans made or guaranteed by a governmental unit, debts for willful and malicious injury by the debtor to another entity or to the property of another entity, debts for death or personal injury caused by the debtor's operation of a motor vehicle while the debtor was intoxicated from alcohol or other substances, and debts for certain criminal restitution orders.
The debtor will continue to be liable for these types of debts to the extent that they are not paid in the chapter 7 case. Debts for money or property obtained by false pretenses, debts for fraud or defalcation while acting in a fiduciary capacity, and debts for willful and malicious injury by the debtor to another entity or to the property of another entity will be discharged unless a creditor timely files and prevails in an action to have such debts declared nondischargeable.
The court may revoke a chapter 7 discharge on the request of the trustee, a creditor, or the U. Main content Chapter 7 - Bankruptcy Basics This chapter of the Bankruptcy Code provides for "liquidation" - the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors. Alternatives to Chapter 7 Debtors should be aware that there are several alternatives to chapter 7 relief.
Background A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter Chapter 7 Eligibility To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor may be an individual, a partnership, or a corporation or other business entity.
How Chapter 7 Works A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets.
Chapter 7 and Chapter 13 bankruptcies are the two most common types of consumer bankruptcies. The process for each is different, as is the length of time they remain on your credit report. In a Chapter 7 bankruptcy , also known as straight or liquidation bankruptcy, there is no repayment of debt. Because all your debts are wiped out, Chapter 7 has the most serious effect on your credit and will remain on your credit report for 10 years.
The accounts included in the bankruptcy, however, are removed from the credit report earlier than that. In a Chapter 13 bankruptcy , your debts are restructured and you typically pay a portion of them over three to five years.
A Chapter 13 bankruptcy is deleted seven years from the filing date and has a lesser effect on your credit than Chapter 7. Usually, a person declaring bankruptcy is having serious difficulty paying their debts and their accounts are often significantly delinquent.
If an account was delinquent when it was included in the bankruptcy, it will be deleted seven years from its original delinquency date , which is the date the account first became late and was never again brought current.
Declaring bankruptcy does not alter the original delinquency date or extend the time the account remains on the credit report.
If the account was never late prior to being included in bankruptcy, it will be removed seven years from the date the bankruptcy was filed. You don't have to wait until your bankruptcy is removed to begin rebuilding your credit history. The good news is that as time goes by and you begin to reestablish your credit, the bankruptcy notations will begin to affect you less and less.
Here are some ways to help your credit recover from bankruptcy :. Stay up-to-date with your latest credit information for free and learn what lenders might see when reviewing your credit. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost. Learn more. Editorial Policy: The information contained in Ask Experian is for educational purposes only and is not legal advice.
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