Re: How to rebuild your score after a ch7 BK
05-22-2012 04:59 PM
Your lawer probably told you that "it doesn't make sense to pay the bills" when you're about to file, or that "the courts frown on people paying bills immediately before filing and may throw out our BK if you pay them". But that's beside the point. Yes, the lates will show until your filing date, with a KD on your discharge date.
However, if they are reported as IIB, those lates won't matter much, if at all.
If you included the paid off cards in your BK, then they were included in the BK and are IIB/Derog. If you didn't include them, the creditor most likely closed the account on their end (Account Closed by Credit Grantor), which is also a derog.
Also, if you didn't list "paid off" revolving accounts as creditors in your BK, you may have inadvertantly committed bankruptcy fraud*. I'm pretty sure that the law says you have to list "all creditors", not just the ones you owe money to. I'll check with an attorney friend, though I'm also pretty sure that if you used an attorney, he/she wouldn't have let you commit BK fraud.
The simple version is, anything before your BK (and included in the BK) doesn't matter much once the BK is there. Positive accounts that were closed prior to the BK will help you, but only a little. what REALLY matters is the date of your BK and everything that comes after it.
*I checked with my friend, it's against the law, but there doesn't seem to be a punishment for it unless you paid some creditors immediately before BK. Basically, you don't get to choose who gets your last $'s before you file.
I can't remember the exact wording my lawyer used (it was over three years ago), that was just the jist of it.
We did list it on the bankruptcy, but I didn't think we included it (does that make sense?). I may be wrong though, all I know is that is why we hired a lawyer so it would be done correctly, I am a rule follower to a T. I had two CC's that I had paid off a few months before we decided to file (we had not been planning on filing at that point), and we definitely listed them to show that we weren't just running up CC's in plans to file BK. I had been hoping that my two paid off accounts would stay open to be a positive on my credit report, but of course the creditors closed them shortly after filing. One account actually shows up as a non derog and one shows up as a derog. So I thought maybe the derog one was reported incorrectly.
Thanks so much for the info!