Credit Cards

After Chapter 7 Bankruptcy: Cleaning Up Your Credit Report

Written by Alethia Scipione

Your Phoenix Chapter 7 Bankruptcy case is over.   You can finally breathe again.  Now, it is time to roll up your sleeves and get to work on cleaning up your credit report.  I’m not going to lie to you, it is tedious, arduous task that you must stay on top of to actually finish.  But, I know you can do it.  You’ve come this far, right!?!

You will receive your discharge order from the court.  Hold on to that document, keep it in a safe place, because you will need to supply this information to the credit agencies.  After about six months from the date of your discharge you should order a free credit report.  You can get access to free annual credit reports, access to the three credit bureaus and access to their dispute processes through this website:

https://www.annualcreditreport.com

 

Simple things to look for:

  1. Verify personal information is correct – including current and former addresses, spouses/co-debtors, employers.
  2. Dispute any credit report inquiries that you did not authorize.

A little more difficult:

Remember before you filed for bankruptcy some of your accounts had been “charged off” by the original creditor and sold to a collection agency (or two or three)?  Well, it’s time to make sure these are reported accurately.  Most importantly, every single one should be listed as “Included in Bankruptcy” or “Discharged in Bankruptcy”.

Take note of any items that are being reported incorrectly and file a dispute using the instructions on the website or by mailing them directly at:

Equifax
P.O. Box 740256
Atlanta, Georgia 30374

Experian
P.O. Box 9554
Allen, Texas 75013

TransUnion
P.O. Box 6790
Fullerton, CA 92834

If you are making payments on something and find that those payments are not being reported try the following:

  1. Request a payment history from the lender/creditor.
  2. File a dispute with each of the 3 credit agencies attaching a copy of the payment history.
  3. The credit bureau is required to verify the accuracy within 30 days.  It should be corrected – either by the credit bureau or the lender.

Good luck on the final leg of your journey!  If you have comments or questions about this post you may contact me directly at alethia@amslawaz.com.

Finally! Limits on Credit Card Companies

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In May of 2009, The Credit Card Accountability Responsibility and Disclosure Act of 2009, or the Credit CARD Act of 2009 was signed by President Obama. The bill becomes effective in February of 2010 and will include protection for credit card holders such as limits on fees and interest charges, use of terms clarified, requirements for how payments must be applied, and protection of young consumers.

I personally, received my first credit card at age 18. It resulted in my first negative credit rating. Honestly, I wasn’t mature enough to handle the responsibility – but even more importantly, I didn’t have the income to take on any debt. The new bill gives special protections for people under the age of 21. They either need a co-signer or proof that there is sufficient income to repay credit. If there is a co-signer involved, there can be no credit limit increases without the co-signers approval.

Right now, credit card companies charge exorbitant amounts for over the limit fees. This often happens to consumers who didn’t even realize the last purchase brought them slightly over their credit limit. The new law will require that any over the limit fee is proportionate to the overage – there can’t be large rate increases for a small purchases that barely brings a consumer over their limit.

Some creditors have been mailing statements late, or changing due dates. Now, statements have to be mailed 21 days BEFORE the bill is due (it used to be 14 days) and there must be a 45 day notice of any change to fees or rates. It also requires that payments over the minimum be applied to the credit card balance with the highest rate of interest (instead of the lowest interest balances).

Consumers have fallen deeper into debt, when they make a late payment and their interest rate sky rockets. The new law requires that under these circumstances, the credit card company must review (AND DECREASE) the interest again after 6 months of paying the minimum balance on time. Also, full disclosure is required – including the true time and cost of paying only the minimum payment.

“Universal default” allowed credit card companies to review a consumer’s credit, and if a consumer was 30 days late on ANY payment (even to another creditor) the consumer’s interest rate could be increased. This bill prevents this from happening.

This is a great step in the right direction. Finally consumers are getting the protection they deserve.

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    Law Offices of Alethia M. Scipione P.C. is a federally designated Debt Relief Agency under the United States Bankruptcy Laws. We assist people with finding solutions to their debt problems, including, where appropriate, assisting them with the filing of petitions for relief under the United States Bankruptcy Code.

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    National Association of Consumer Bankruptcy Attorneys