Terrance was standing outside my door when I unlocked, Friday last week.
Terrance filed Chapter 7 bankruptcy with me, January 2013. I tell people you can get approved for a mortgage as soon as two years after your bankruptcy discharge. Terrance got his mortgage approved two years and four months after his bankruptcy. Or he thought he did. They told him in December, everything was fine. Last Thursday, they turned him down. He was scheduled to close on his new house, Tuesday. He freaked.
There was a problem on Terrance’s After-Bankruptcy Credit Report
In December, the mortgage company said they’d fix the problem on Terrance’s credit report. They didn’t.
When he first applied for the loan, the mortgage company told him there was a problem. One of the debts discharged in his 2013 bankruptcy looked like it was still there. Terrance made an appointment to see me last December; but then he cancelled.
The mortgage company told him they would take care of it. Turned out they didn’t.
Here’s the happy ending.
I’m one of maybe fifty bankruptcy lawyers around the country who fights all the time for my clients to fix their after-bankruptcy credit report. Because of my experience, I knew the compliance officer at the outfit that was causing the problem. I had his phone number and email, and he was in his office that Friday morning. I got him.
By noon, we got the paper the mortgage underwriter needed, showing that debt was taken care of in the bankruptcy. The mortgage got approved Monday. Terrance bought his house on schedule, Tuesday.
Two Lessons
I think every bankruptcy lawyer needs to know at least a little about Fair Credit Reporting. You don’t really get your “fresh start” in bankruptcy, if your after-bankruptcy credit report is wrong.
You should really check your credit report, with your lawyer, a couple months after your bankruptcy is over. (And keep checking it.) Don’t wait until you are turned down for your after-bankruptcy mortgage.
My Promise
I promise to fight for you to make your after-bankruptcy credit report right, for as long as five years. You can read more about that, here.
Most bankruptcy lawyers will have nothing to do with after-bankruptcy credit reports; and sometimes it makes a enormous difference.