Douglass, West & Associates

Discharge in Bankruptcy and Your Rights

After you have been discharged you will receive a copy of your discharge in bankruptcy. This document certifies that you have been discharged from liability for payment of any and all debts that are dischargeable under the Bankruptcy Code.

This does not mean that you can ignore any creditor’s attempt to collect these debts. If any of your creditors tries to collect a debt that you listed on your bankruptcy petition, you should contact this office as soon as possible so that you may assert your rights under the Bankruptcy Code and receive the full protection of your discharge.

The discharge also protects you from many types of discrimination based in your bankruptcy or the debts you eliminated in the bankruptcy. Generally, no government agency or employer can treat you differently than other people just because you filed a bankruptcy case or because of the debts you did not pay before the bankruptcy.

It is also important for you to be aware of your rights when applying for credit in the future. There are laws that protect your rights. If any of these laws are violated, you may be entitled to sue the creditor for damages, as well as make him pay your attorney’s fees.

The Equal Credit Opportunity Act forbids the discrimination of granting credit, when such discrimination is based on race, color, religion, national origin, sex, marital status, age, or the fact that any of your income derives from a public assistance program such as Welfare, Social Security or Unemployment Compensation.

The Equal Credit Opportunity Act states that a creditor may not, either orally or in writing, discourage a person from making or pursuing an application for credit on any of the forbidden grounds. Generally, a creditor may not ask information about a spouse or request the signature of your spouse or a cosigner except in limited circumstances. Please call me if you need further details about a request for a cosigner.

Once you apply for credit, whether orally or in writing, the creditor must give you a written notice within 30 days stating specific reasons why credit is being denied and setting forth your rights under the Equal Credit Opportunity Act. Do not allow yourself to be dis­couraged from submitting an application, insist on a written statement of reasons for denial.

If a creditor requires a credit check, it must disclose whether a denial of credit is based on information from a credit reporting agency, together with the name and address of that agency. The credit reporting agency must then disclose to you the nature and substance of all information in its files. If bankruptcy has been filed, the credit agency may keep that record for 10 years; as to other debts, the record may be kept for 7 years, except that any debts that have been discharged in bankruptcy should report as “discharged in bankruptcy”.

If you dispute the accuracy of any information that the credit agency has in its file, you can ask the credit agency to reinvestigate. If the reinvestigation does not resolve the dispute, you may submit a short statement in writing telling your side of the story. In all future reports, the credit agency must note your dispute. The credit agency will send out a corrected record to any one who inquired about your credit within 6 months before the correc­tion.

If you think you are going to have problems in applying for credit, you should take a witness with you to make sure that your rights, as outlined above, are being observed. The creditor has no right to insist that your witness cosign for you, and you should be sure that this does not happen.

Further, please note that if you have received a Chapter 7 discharge you may not file another Chapter 7 Bankruptcy Petition until eight years from the date of filing of the original petition.

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