Unless it's a debt that can survive a bankruptcy preceding I don’t see how the credit bureau rep can claim its still technically owed.

IMO a experienced Trustee is > Credit Bureau Rep opinion.

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RichardC,
So you agree with me then..?

mwieler...

no.. that's the point.. the balance owing still shows on the amounts declared in the bankruptcy.. it doesn't go to $0

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Monty,

I called a trustee friend of mine today. I had to ask about this concept of a debt technically still being owed post bankruptcy and dragging down the score. This concept blew me away.

Turns out that credit bureau rep didn't know what they were talking about.

He tells me the only debts that can possibly survive a bankruptcy or proposal proceeding include:

Student loans (depending on when you left school)
Spousal support
Child support
Any debts obtained through fraud (proven in court)

Did the credit score of this particular person remain south because of errors on the report? A debt (ie FRO) that survived bankruptcy? Or maybe because they didn’t use a secured card to rebuild credit?

I would agree to act quickly after the bankruptcy. Get a secured credit card and start building credit. With lenders being tighter than ever they are looking for two lines of re-established credit after a bankruptcy. One can be a car loan and the other would need to be another preferable revolving credit item, again such as the secured credit card.

Be sure to review the credit bureau and to see what debts have been taken care of. Make sure that the credit bureau matches up what is on the bankruptcy discharge papers.

I've seen bankruptcies for as little as $5600 to as much as $975K. They are very complicated and things can get missed or overlooked but again, the individual has to take some responsiblity and get things looked at, perhaps even by a third party.

I don't think I've ever seen a "good bankruptcy"...if there is such a thing as a good bankruptcy.

The best thing for a person to do after discharge; is get a secure credit card to boost up your credit score. I would get more then one if you can afford it.
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Thats an interesting concept.

We know the trustee is a appointed agent to the creditors; even though you are paying them to deal with your debt, they are really looking after the banks best interest... and now at the end of the day when its all said and done you "technically" still owe the debt AND it can keep dragging your score down? Wow.

victorj makes a good point..

sometimes the bankruptcy trustee doesn't disclose all of the information to the credit bureau.. and sometimes the creditors don't properly report the bankruptcy. they're not really motivated to do so..

bankruptcies are a really messy thing as far as credit reports go and are very hard to clean up.

RichardC, technically the debt is still owed... however there is creditor protection which means that it can't be collected.

this is an important point to remember...

I had a client who declared bankruptcy.. his credit score kept going down, YEARS after he was discharged.. I disputed this with consumer protection and the credit bureaus.

The credit bureau and consumer protection said that based on teh bankruptcy act, the debt is still owing and COULD possibly draq your score down.

I was really surprised with this as I thought that bankruptcy distinguished the debt. The debt is still owing but is not collectable.

This makes it really messy trying to deal with the credit bureaus.