Cleaning Up After Bankruptcy

Bankruptcy is a fresh start. Your credit report should reflect that. But creditors often refuse to update their records, leaving “zombie” trade lines that drag down your score years after your discharge.

What It Should Look Like

After your Discharge Order is entered:

1. Balance: Must be $0.
2. Status: Must say “Discharged in Bankruptcy” (or similar).
3. Past Due: Must be $0.
4. Charge Off: Should not show a current charge-off status with a balance.

Common Violations

• Reporting a Balance: Keeping a $5,000 balance on a discharged credit card is illegal. It looks like you still owe the money.
• “Charge Off”: Reporting the account as a current “Charge Off” every month updates the “Date of Last Activity,” making the negative item look fresh.
• Debt Buyers: Selling the debt to a junk debt buyer who then opens a new collection account on your report.

The Fix

1. Dispute: We send a specific dispute to Equifax, Experian, and TransUnion attaching your Discharge Order.
2. Sue: If they verify the debt as “accurate” (which they often do), they are violating the FCRA and the Bankruptcy Discharge Injunction. We sue to force the correction and recover damages for the harm to your creditworthiness.