What Bankruptcy Does to a Credit Report

An important question in regards to bankruptcy is whether or not it will appear on future credit reports and what is allowed to be left off the reports entirely. While a bankruptcy lawyer can answer any questions in regards to particular situations and help guide you through issues that may arise, here is a general overview to give a basic understanding of bankruptcy and credit.

A bankruptcy claim can stay on a credit report for up to 10 years, but this isn’t necessarily considered to be a bad thing. Any debts that are wiped can clean up any charges that were listed as delinquent in the past, improving overall credit over time and allowing for the building of better credit to take place. So, while it may seem like a devastating blow to the credit score to file for bankruptcy, it could very well be in your best interest to contact a bankruptcy lawyer and get the filing started right away.

It is possible that even though the bankruptcy claim was successful and the debts have been taken care of, the credit score will not properly reflect the changes. There are some things not allowed to appear on a credit report, according to bankruptcy lawyers. A creditor may not report a discharged credit as:

• owed or active
• delinquent
• charged off

The also may not:

• say that you have a balance due
• say that it has been converted to a new kind of debt

If the report is misrepresented, a Dallas bankruptcy lawyer can help direct you to the correct avenues to fight the claims and return the credit score to where it should be.