Legal Question in Bankruptcy in Virginia

Re: After Bankruptcy

Actually, this is a common misconception. The law states that once a debt is discharged a creditor may not pursue any further collection on that debt--including phone calls, collection letter, or obtaining a judgment or a garnishment. Actually, the "automatic stay" begins even earlier than that--at the time the bankruptcy is filed.

But, as far as credit reports go, a creditor is not required to remove the debt from the credit report. Sometimes you will see a notation on the credit file that says "included in bankruptcy," though. In short: bankruptcy does not act as a "clean slate" to wipe everything off your credit file. Those creditors just can't attempt to collect on their debt anymore.

When you apply for credit in the future (say, if you try and get a mortgage or car loan), the creditor usually asks to see a list of your creditors from your bankruptcy schedules. They will then match up the creditors you listed on your bankruptcy with those listed on your credit report. Once they see that (hopefully) everything on your credit report was included in your bankruptcy, they can they move forward with the loan.

Contrary to what many people think, I have seen many people qualify for a mortgage within one year of their bankruptcy disharge and obtain a car loan even sooner than that (often right after the bankruptcy discharge). So it's often easier to rebuild your credit sooner than many people believe.

Re: After Bankruptcy

No, that's not the way it works. The "credit reporting agencies" merely pick up and report information from numerous sources -- public records, reports from member companies, etc. The fact that you had a debt, that you didn't pay it, and that it was ultimately discharged in bankruptcy, is properly included in your credit report.