Legal Question in Bankruptcy in Wisconsin

Many creditors argue that they are unable to report favorable payment history on loans which were not reaffirmed in bankruptcy because all reporting to credit bureaus is prohibited by bankruptcy laws. Nothing could be further from the truth. Favorable reporting is not an attempt to collect of the type which would be otherwise prohibited if the debt was discharged in bankruptcy, so reporting a good payment history is therefore is allowed. While attempts to collect the debt would be illegal, there is nothing wrong with listing voluntary payment as agreed. However, the opposite side of the coin (reporting a bad payment history) probably would represent an illegal attempt to collect on such a discharged debt. Creditors therefore argue that because they cannot post the bad information, they are also prohibited from posting the good. In reality, this is probably an excuse to punish people who have filed bankruptcy. Even if you had signed and returned a reaffirmation, there was no way to force the lender to accept it or file it with the court, so there may have been no way for you to avoid this outcome. Yours is a very common problem, and I can only suggest is to make sure that all of your payments are on time and that you pay the loan off, rather than attempting to refinance or trade. Unfortunately, odds are good you probably would been denied the loan you want regardless of whether the reaffirmation had been filed.

In most cases, it normally takes 2-3 years for your credit to improve to the point where you would be approved for anything other than sub prime, high interest rate financing. I therefore encourage all of my clients to re-establish credit by having at least a few smaller retail credit accounts paid in full prior to filing, meaning that these accounts will therefore usually remain open. After filing, they then need to use these accounts in a small way, and making all payments on time, thereby creating a new positive credit history post bankruptcy. Many clients report excellent results getting new credit later if they do this. Please do not assume that I am your attorney because of my response here, but feel free to call my office in Racine (262-633-3090 or email [email protected]) for clarifications regarding my answer. Otherwise, under the rules of this website, I would not be taking any further action on your case. See me on the web at www.jayknixonlaw.com. View my past answers at http://www.avvo.com/attorneys/53401-wi-jay-nixon-1529181/answers.html?sort=recency , or see an even larger collection of responses at http://www.lawguru.com/answers/search/attorney/jknixon, . Answers may contain attorney advertising materials...