February 23, 2018

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Cleaning Up Your Credit After Bankruptcy

There’s a widespread belief that bankruptcy automatically will give you a “clean” credit file. The bad news is that just isn’t the way it works. Cleaning up that ugly credit file is your responsibility.

Just because you’ve been through a bankruptcy and received a discharge doesn’t mean that those old debts have disappeared from your credit report.

Most of the time, they’re still on your report. And with each passing month, those old debts become more and more derogatory.

Under the law, creditors are supposed to update your accounts to reflect that they were included in your bankruptcy.

So why are they still showing up as derogatory accounts? Simply put, there’s a loophole. There’s no time limit for them to do the update.

As a result, you may find that some of those creditors are taking their sweet time in updating how your account is reported.

Does the term “vindictive” sound familiar?

So let’s go over a few steps that you can take to speed things up and get your financial life back.

At this point, we’re going to work from the following assumptions:

  • You’ve just gone through a bankruptcy
  • Your bankruptcy has discharged
  • You’re ready to clean up your credit report

At this point, we want to give you some further insights and the means to really do something about your credit report.

Bankruptcy usually will destroy even the best of credit ratings. Your score will take a major hit and all those debts that were put into the bankruptcy are still on your credit report.

Each month that passes usually causes those old debts to show even more delinquent than the previous.

First of all, you must realize that it’s not the credit bureau’s fault. Nor is it your lawyer’s fault. No – the fault lies squarely with your creditors.

The good news is: you can actually do something about it.

It really isn’t terribly complicated, but there is a process you need to follow to accomplish your objective.

Will all those old debts “magically” disappear? Nope. So, what’s the point?

The point is this: by simply updating that really ugly credit report and showing that those debts were included in your bankruptcy, you may realize a significant rise in your credit score.

So just how does that reflect in my credit score?

It’s simple. Instead of having a creditor report your account as “delinquent” with a terrible rating, it now will report as “included in bankruptcy” with no rating attached.

Take, for example, the case of a car loan where a car was surrendered in the bankruptcy. It doesn’t matter if it was a voluntary surrender or not – it’s a repossession. And that’s how it gets reported to the credit bureaus.

And just what do you think your chances are of getting another car loan now? Remember, you now have a “repo” in your credit file.

If you guessed “not so hot,” you’re pretty close.

Now, if that same car loan gets reported as “included in bankruptcy” instead of “REPO,” you just improved your chance of getting financing by about 100%.

So, let’s get on with what you need to do in order to get that “fresh start” that the bankruptcy was supposed to give you.

First of all, you will need your bankruptcy papers. It’s that big stack that your lawyer gave you when you filed your bankruptcy.

Find the “Schedule of Creditors.”

You will need 3 copies of this schedule for each person named in your bankruptcy filing.

Now, find your “Letter of Discharge.” Once again, you’ll need 3 copies of this letter for each person named in your bankruptcy filing.

Place a copy of the Discharge on each of the copies of your Schedule of Creditors. You’re going to mail this stack of papers to each of the 3 credit bureaus, along with a cover letter.

The cover letter can be short and sweet. Here’s what we recommend:


Please use the enclosed Federal Court Documents to update my credit file.


That’s all you need. No excess verbiage. And no threats. None of that helps, anyway.

Now, here’s the really good news. The credit bureaus are fanatic about accurately reporting your credit file.

Not that they’re on your side – they are forced to do this by law. And they don’t want the Federal Government crawling up their backsides.

As a result, the credit bureaus will do the work for you. They recognize and accept the court documents and will use them to update your file for you.

Doing this on your own would involve your contacting each and every creditor and then forcing them to update your credit files. Let the credit bureaus do it for you.

After you’ve gotten all these papers together, send each of them to the 3 credit bureaus.

Send it by certified mail with a return receipt.

You want to know that they got there. And you want to know when they got there.

The credit bureaus have 30 days to update your file, so don’t get anxious. Our experience has shown that they usually will send you an updated report, showing all the changes, within 2 to 3 weeks.

Now that you’re armed with what you need, there’s no need for you to endure an ugly credit report any longer.

Credit Bureaus and Their Addresses:

(Note: We recommend that you visit each of these websites to verify current addresses)

P.O. Box 740241
Atlanta, GA 30374


P.O. Box 2104
Allen, TX 75013-2104


P.O. Box 2000
Chester, PA 19022