If the foreclosure shows up on your report, dispute the credit report and ask the lender to indicate "debt discharged in chapter 7 bankruptcy
Chapter 7, Title 11, United States Code
Chapter 7 of the Title 11 of the United States Code governs the process of liquidation under the bankruptcy laws of the United States. Chapter 7 is the most common form of bankruptcy in the United States.
Does Chapter 7 affect credit report after bankruptcy?
Unfortunately, that’s a double-edged sword. Credit Reporting Of Mortgages After Bankruptcy. If you file for Chapter 7 bankruptcy and discharge your mortgage obligations, the creditor can report only that the balance due is $0 and the debt was discharged in bankruptcy.
Can a creditor report a mortgage payment after bankruptcy?
Unfortunately, that’s a double-edged sword. If you file for Chapter 7 bankruptcy and discharge your mortgage obligations, the creditor can report only that the balance due is $0 and the debt was discharged in bankruptcy. The creditor cannot report a balance due, nor can it report any payments you make on the loan after bankruptcy.
What happens if you fall behind on mortgage after bankruptcy?
If you fall behind on your mortgage after bankruptcy, the lender may be able to sue you for the deficiency if the foreclosure doesn’t bring in enough money. In addition, your late payments will be reported to the credit reporting agency if you fall behind again.
Should you reaffirm your credit after a bankruptcy?
Though this may at first blush look like a fix to the credit reporting problem, reaffirmation carries significant long-term risks. If you fall behind on your mortgage after bankruptcy, the lender may be able to sue you for the deficiency if the foreclosure doesn’t bring in enough money.
Why isn't my foreclosure showing on my credit report?
Foreclosures, like other negative marks, won't be on your credit report forever. In fact, a foreclosure must be removed seven years after the date of the first late payment that led to its default. In credit reporting terms, this is called the date of first delinquency, or DoFD.
Does a credit report show foreclosure?
A foreclosure entry typically appears on your credit report within a month or two after the lender initiates foreclosure proceedings. The entry remains on your credit report for seven years from the date of the first missed payment that led to the foreclosure.
How are foreclosures reported on credit reports?
Record of a foreclosure remains on your credit report for seven years from the date of the first missed mortgage payment that led to the foreclosure action. In addition to loss of the home, it can have long-lasting negative effects on the mortgage borrower's credit and ability to secure a new loan.
Why is my mortgage not showing on my credit report after Chapter 7?
Mortgage companies will not report your mortgage payments because they are concerned that it violates the automatic stay or discharge injunction. The concern is that reporting the payments on the credit report can be treated as an attempt to collect a discharged debt.
How long before a foreclosure falls off credit?
seven yearsSimilar to medical debt and certain bankruptcies, it takes seven years for foreclosures to disappear from your credit report. The unfortunate news is that as long as the foreclosure is listed on your credit report, your credit score will be negatively impacted by it.
How many years does a foreclosure affect you?
A foreclosure stays on your credit reports for seven years from the date of the first missed payment, bringing down your credit score. After that period of time, the foreclosure mark should automatically fall off your reports.
Which is worse foreclosure or Chapter 13?
A foreclosure or short sale, as well as a deed in lieu of foreclosure, are all pretty similar when it comes to impacting your credit. They're all bad. But bankruptcy is worse. Going through a foreclosure tends to lower your scores by at least 100 points or so.
How can I fix my credit after foreclosure?
Rebuilding Credit After a ForeclosureIdentify the cause of your foreclosure. ... Pay your bills on time. ... Make a budget and stick to it. ... Get a secured credit card. ... Keep an eye on your credit utilization ratio. ... Seek a professional's help. ... Check your credit scores and reports regularly. ... Be patient.
What happens if you don't reaffirm your mortgage?
If you do not reaffirm your loan, then your lender will not send out monthly loan statements. Yes, if you retain the car or house, then you still owe the money and need to make a payment, but you'll need to photocopy an old statement to make sure you know the account number and payment address.
What happens when you reaffirm a mortgage?
Reaffirming your mortgage means that you file paperwork that states that you affirm this debt regardless of your bankruptcy discharge. That protects your lender from losing out on the money they have invested in the property, and it also allows you to retain your ownership in the home and your accumulated equity.
How long does it take for a paid off mortgage to show on your credit report?
When you pay off a credit account, the lender will update their records and report that update to Experian. Lenders typically report the account at the end of its billing cycle, so it could be as long as 30 to 45 days from the time you pay the account off until you see the change on your credit report.
How do I remove a foreclosure from my credit report?
Your foreclosure can be removed from your credit report if the lender voluntarily dismisses the foreclosure lawsuit. This is most common in states where the homeowner can propose a voluntary foreclosure, also known as a deed in lieu of foreclosure.
Does pre foreclosure affect credit score?
How Does Pre-Foreclosure Affect Your Credit? There is no formal entry on a credit report that indicates a mortgage is in pre-foreclosure, so pre-foreclosure has no direct effect on credit scores.
What happens if you don't pay your debts in bankruptcy?
If you do not pay the debts, the lender will have the right to foreclose the property. This foreclosure will badly effect your credit score and credit report. Thanks.
What happens if you walk away from a house?
If you walkaway from the property, the lender will have the right to foreclose the property. The foreclosure will also badly affect your credit and will lower your credit score by 250 points. You can definitely apply for a deed in lieu with the lender. You will have to write a hardship letter the lender.
Does short sale affect credit score?
However, this short sale will definitely effect your credit score. Can someone provide a definitive answer on this. Some say the mortgage discharge will be listed separately if the mortgage company forecloses after the discharge, others say it will be listed as part of the discharge.
Can you report foreclosure if you did not reaffirm?
No they cannot report your foreclosure if you did not reaffirm!! That MUST be listed on your credit report as part of the bankruptcy by law. If they add anything to your credit report about foreclosure after your discharge debt, contact the credit bureau demanding removal. I would get a lawyer to get compensation for the damage they did to your credit.
Timothy S. Kingcade
As others have told you, your default on the mortgage can be discovered by mortgage companies from other sources other than a notation on your credit report.
Earl David Maxwell
Since you filed BK before the foreclosure, the foreclosure will not (should not) appear on your credit report. However, that doesn't mean the foreclosure didn't happen. Lenders have other ways of finding the foreclosure.
Matthew Scott Berkus
It will likely appear on there. A short sale will help your credit quite a bit. So you should look into it.
Matthew Erik Johnson
It is properly showing a $0 balance because of the discharge, and it may show that way for 7 years. The bankruptcy itself will likely also appear on your credit bureau report in the Public Information section as a Chapter 7 Bankruptcy in which a discharge was granted, giving the court, date, and case number.
Rex Edward Russo
Credit reports reflect what information the lender provides and/or what is reported in public records so it is possible that one person's credit report might report the foreclosure and the other might not.
Blaise E. Picchi
No, a mortgage that was not reaffirmed is not the same as a foreclosure without a bankruptcy. You were discharged regarding your liability on the mortgage note. The foreclosure, however, will proceed but the lender cannot obtain a judgement against you for any amount of money.
Paul Stephen Johnson
My clients have been experiencing delays with creditor banks foreclosing on properties in Florida. You or your attorney may want to contact the bank to determine a non-foreclosure remedy (deed in lieu or short sale, for example) if you want to accelerate the process.
Perry B. Thompson
Once the discharge occurs, the stay is lifted and the bank can resume it foreclosure process. But, the process is not accelerated because of the bankruptcy. Or more precisely, bankruptcy law does not accelerate the process.
What happens if you add FICO to your report?
If it gets added to your reports I'd expect a large drop in your FICO score, which may hurt your chances of approval. I'd try to avoid having it added.
Does a credit report have to reflect bankruptcy?
There is no statute that says your report has to reflect your bankruptcy or foreclosure. Your credit report is not the avenue where these public records are supposed to be kept. In fact, there is no requirement that anyone report anything to your report, only that what they report is accurate.
How long does foreclosure stay on your credit report?
The foreclosure will stay on for 7 years. You pretty much will not be able to purchase a home for the next 5 to 10 years anyways so don't worry about it too much.
What happens if a post-BK foreclosure is not reported on the credit bureau report?
I was told that if the post-bk foreclosure is not reported on the credit bureau reports, then only the bankruptcy discharge date is used to determine the seasoning period.
What is foreclosure action after bankruptcy?
The foreclosure action after the bankruptcy discharge is an action against the property, not you personally even though you are named as a party of interest on the filing. It should NOT appear on your credit reports in any way. Not as a public record, and not as a foreclosure mark on a tradeline. The loan tradeline should read "discharged" with $0 balance and no further activity past the filing date.
What can a bank do if a deficiency judgment is wiped out?
The only thing the bank can do is foreclose on the property and sell it to try to recoup whatever they can. The bank cannot come after you for the difference. That has not stopped some banks from trying but if they do, it is a violation of the discharge.
How long can you buy a home if you never owned a home?
There are actually two requirements to be met. If you never owned a home when you filed Bk, then you can purchase 2 yrs from discharge thru FHA financing. This requirement changes since it was 2 yrs and then went to 3 yrs and now as of this month, April 2010, is going back to 2 yrs.
When does personal liability end for a loan?
Your personal liability for the loan ended when the bankruptcy discharge was entered regardless of if the lender took the deed back during that process. If they chose foreclosure outside of taking the deed back through the bankruptcy trustee -- which is common if the primary lienholder wants to wipe out secondary liens--, you are not liable for anything.
Does a Chapter 7 bankruptcy in Florida require a foreclosure?
It looks like a property that has been surrendered in a chapter 7 bankruptcy in Florida still will have to go through the foreclosure process for the lender to get the Deed.
Early Removal of a Bankruptcy From Your Credit Report
When you file for bankruptcy, it will appear on your credit history. Chapter 7 bankruptcy cases stay on your credit report for 10 years and Chapter 13 cases stay on for seven years. After this time passes, the bankruptcy should disappear from your credit report automatically.
Main Types of Bankruptcy for Consumers
Consumers primarily use Chapter 7 and Chapter 13 for filing bankruptcy. Either will activate an automatic stay to prevent creditors from collecting debt while your case is being processed. Filing either type of bankruptcy will decrease your credit score anywhere from 130 to 240 points.
Credit Repair After Bankruptcy
As tough as bankruptcy is, it provides you with the opportunity to get a clean financial slate. Then you can start to repair your credit. Building a good credit score is important because it impacts your ability to get loans and credit cards and to get approved for a mortgage or even to rent.
What does it mean when a new mortgage lender asks for a credit report?
A new lender is looking not for a positive credit report with respect to your mortgage. Rather, the inquiry is one of whether you’ve been making timely payments to the mortgage lender.
What happens if you file for bankruptcy and discharge your debts under Chapter 7?
If you file for bankruptcy and discharge your debts under Chapter 7, all a mortgage company can do is foreclose and take back the property. Once they tell the property, the bank can’t come back to you for a deficiency.
What is reaffirmation in bankruptcy?
Reaffirmation is a side agreement between you and your lender whereby you agree to remain personally liable for repayment of the debt in spite of the bankruptcy filing. In essence, you are waiving the bankruptcy discharge as to this particular creditor.
What is RESPA in mortgage?
The Real Estate Settlement Procedures Act (RESPA) gives homeowners the ability to request information from their mortgage lender in the event that they have reason to believe that their account is in error.
What to do after bankruptcy?
After bankruptcy, you can use all the help you can get when it comes to maximizing your chances for a new loan. Don’t let your old mortgage get in the way of refinancing or getting a new loan.
Who must acknowledge receipt of a mortgage request?
The servicer must acknowledge receipt of the request and respond within specified time periods, and will provide you with a complete breakdown of payments received and how the funds were allocated. You can take this to the new lender or your mortgage broker.
Can a creditor report a balance due?
The creditor cannot report a balance due, nor can it report any payments you make on the loan after bankruptcy. Doing so may violate the Fair Credit Reporting Act and subject the mortgage lender to legal liability.