Every year, thousands of overwhelmed Americans declare bankruptcy in order to obtain a fresh start financially. Bankruptcy may be the only way you can get rid of certain debts you know you’ll never be able to pay.
So you hire an attorney who has the majority of your debts discharged. You have decided to keep your car and home by making timely monthly payments. You not only need to live, but you hope to get a head start on rebuilding your credit score by staying current on these payments. Yet, you recently checked your credit report and there isn’t a single payment listed for your car or home!
The most likely explanation for the lack of positive reporting is that because your debts were discharged through the bankruptcy proceeding, voluntary payments (for your car/house) cannot be reported on your credit history.
In bankruptcy, your debts are discharged – which means you no longer have the obligation to pay them. However, for secured loans like home loans (mortgages) and car loans, the bank or lender still has a lien on your home or car, respectively. This means that if you do not continue to make payments, the bank can foreclose on your home or repossess your vehicle.
Nevertheless, you still have no real obligation to continue paying the loans due to your bankruptcy, so anything you pay is considered voluntary. This is assuming you did not reaffirm your debt prior to receiving your bankruptcy discharge. You should never reaffirm a debt without consulting with a knowledgeable bankruptcy or consumer rights attorney.
Just because creditors or the credit bureaus won’t credit you for voluntary payments doesn’t mean you can’t do it yourself. You are allowed to report timely payments on your credit history, even if they are voluntary. And the procedure is quite simple. In fact, there are many providers who will do it for you. Visit https://www.prbc.com/for one of these service providers. You can also do a Google search for “self-reporting timely payments,” or “self-reporting credit.”
If you have come upon hard times making the payment of bills impossible, you need the help of an experienced debtor rights attorney—like those at Fitzgerald & Campbell, APLC—to review your case and discuss your options with you, whether that means bankruptcy, a negotiated settlement or lawsuit. Our attorneys have decades of experience representing clients in all types of consumer rights matters, including bankruptcy, and we are here to help you!