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QUESTIONS NOW THAT MY BANKRUPTCY IS OVER…..

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A discharge in bankruptcy cannot be granted if you have received a discharge in a chapter 7 bankruptcy case filed in the last 8 years. A Debtor is prohibited from receiving a discharge under Chapter 13 if they received a discharge in a 7,11 or 12 bankruptcy which was filed within the last 4 years; or a chapter 13 case in the last 2 years. 11 U.S.C. § 1328(f).

Debtors frequently want to friends, family or employers back monies that they have borrowed. This is called preferential treatment.

That means that you owed other creditors money, but preferred to pay your friend or relative. This includes not only family but also other creditors (paying off a credit card so they can keep it after the bankruptcy). If you made these preferential payments within 90 to 365 days prior to filing the bankruptcy, the Court can force the parties who received the money to give it to the Bankruptcy Trustee. The 90 day period is for “outsiders” – those that have no reason to want to help the Debtor. If the person/entity receiving the funds is an “insider”, then the period extends to one full year.

“Insider” is defined in 11 U.S.C. 101 and includes family members, partners, and corporations in which the debtor is a decision maker.

It is not wrong for the debtor to make payments to one creditor and not another so long as they are certain types of debts. If the Trustee elects to go after the monies or transfers made to that creditor, then it is the creditor who will lose, not the debtor. This is an issue that needs to thoroughly discussed with your attorney, BEFORE making the payment or the transfer.

There is nothing to prohibit you from voluntarily paying anyone you wish after your bankruptcy is completed.

The same problem arises if the Debtor sold or transfers any assets prior to filing for bankruptcy. The look-back period is 90 day for outsides and two years for insiders. Again, do not make any transfers or give any any assists without first obtaining the advice of an experienced bankruptcy lawyer.

(Los Angeles Times, by Liz Weston 10/30/15 & InForum, by Liz Weston on Nov 8, 2016 )  Q: How do you repair credit scores after filing for bankruptcy? My husband and I are in this situation and are looking to re-establish credit and increase our credit score. Also, how long do closed accounts appear on the credit report?

A: Filing for bankruptcy may have actually helped your scores. Researchers at the Federal Reserve Bank of Philadelphia found scores typically plunged in the 18 months before people filed for bankruptcy and rose steadily afterward. The average credit score before someone filed Chapter 7 was 538.2 on Equifax’s 280-to-850 scoring range. By the time filers’ cases were discharged, their average score was 620.3.

Get a secured credit card or a loan with a credit-builder loan. Typically you deposit money ($200 to $500) into an account from which you can borrow or use the credit card.  Normally these payments will be listed on your credit report.  Make sure to ask the bank or credit card company if they report this type of secured debt on the credit report.

“You should use the card lightly but regularly, being careful not to charge more than about 30 percent of its credit limit and paying the balance in full each month.”  Rest of the article

The Fair Credit Reporting Act – 15 USC 1681c(a)(1) provides that no consumer reporting agency may report “cases under title 11 or under the bankruptcy act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years”.

To interpret that legal jargon into English it means that the credit reporting agencies must remove any reference of your bankruptcy after 10 years from the date of filing your bankruptcy, not the date of your discharge.