In a typical Iowa Chapter 7 bankruptcy case a discharge, final decree and case closure are generally provided around 61-70 days from themeeting of creditors. You receive a document which certifies that you have been discharged from liability for payment of any and all debts which were made dischargeable by the Bankruptcy Code. (Some are not, like child support and most student law debt). In other words, your bankruptcy is usually completed. Congratulations!
This does not mean, however, that you can ignore any creditor’s attempt to collect these debts. Sometimes they still try. If any of your creditors try to collect a debt which you listed on your bankruptcy petition, you should contact me (or another attorney) so that you may assert your rights under the Bankruptcy Code and receive the full protection of your discharge–called a permanent injunction against collection.
The discharge also protects you from many types of discrimination based in you filing a bankruptcy or the debts you eliminated in the bankruptcy. Generally, no government agency or employer can treat you differently than other people just because you filed a bankruptcy case or because of the debts you did not pay before the bankruptcy.
It is also important for you to be aware of your rights when applying for credit in the future. There are laws which protect your rights. If any of these laws are violated, you may be entitled to sue the creditor for damages, as well as make him pay your attorney fees.
The Equal Credit Opportunity Act forbids discrimination in the granting of credit, when such discrimination is based on race, color, religion, national origin, sex, marital status, age, or the fact that any of your income derives from a public assistance program such as welfare, Social Security, or unemployment compensation.
The Equal Credit Opportunity Act states that a creditor may not, either orally or in writing, discourage a person from making or pursuing an application for credit on any of the forbidden grounds. Generally, a creditor may not ask information about a spouse or request the signature of your spouse or a cosigner except in limited circumstances.
Once you apply for credit, whether orally or in writing, the creditor must give you a written notice within thirty (30) days stating specific reasons why credit is being denied, and setting forth your rights under the Equal Credit Opportunity Act. Do not allow yourself to be discouraged from submitting an application; insist on a written statement of reasons for denial.
If a creditor does a credit check on you, it must disclose whether a denial of credit is based on information from a credit reporting agency, together with the name and address of that agency. The credit reporting agency must then disclose to you the nature and substance of all information in its files.
The credit reporting agency may report your bankruptcy filing for ten (10) years; as to other debts, information may be reported for seven (7) years, except that any debts which have been discharged in bankruptcy should no longer be reported as having a balance owed and instead should be reported with a zero balance. You should check your credit report to make sure that the debts discharged in your bankruptcy are being reported correctly. You may get one free copy of your credit report per year from each of the national reporting agencies. The three nationwide consumer reporting agencies have set up one central website, toll-free telephone number, and mailing address through which free annual reports can be ordered. You can click on www.annualcreditreport.com, call (877) 322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Georgia 30348-5281. The Form can be printed at www.ftc.gov/credit.
If you dispute the accuracy of any information which the credit reporting agency has in its file, you can ask the credit agency to reinvestigate. This request should be made in writing using the agency’s dispute form or your own simple letter. You should keep a copy of whatever you send. The agency must reinvestigate by at least asking the source of the information to respond to your dispute. If the source can not or does not verify the disputed information, it should be removed from your credit report. If the reinvestigation does not resolve the dispute, you should contact our office. You may also submit a short statement in writing telling your side of the story. In all future reports, the credit agency must note your dispute. The credit agency will send out a corrected record to anyone who inquired about your credit within six (6) months before the correction.
If you think you are going to have problems in applying for credit, you should take a witness with you to make sure that your rights, as outlined above, are being observed. The creditor has no right to insist that your witness cosign for you, and you should be sure that this does not happen.
For more information on credit report issues click here.
If a creditor on a secured claim refuses to report that you are paying regularly you should request an annual statement of payments from the creditor and send this to the credit reporting agencies to help build your credit again.
Also, you should think carefully about your budget. For an excellent basic budget plan visit other Blog entries to read about the issues to help you stay out of debt problems and build a financial safety net. You can also listen to my Life and Debt Radio Shows For an in-depth version of the points raised in the Blog and on Life and Debt, I highly recommend the book All Your Worth by Harvard Professor Elizabeth Warren and her daughter Amelia Warren Tyagi, two of America’s leading champions for debtors. This book gives a simple understanding of how to deal with your budget in the future in order to prevent debt problems, to maximize your income use and create financial security. It is available at public libraries but can also be purchased in paperback from bookstores at a very reasonable cost.
Iowa Bankruptcy Attorney Robert J. Liptak
Fairfield, Iowa