How to Improve Your Credit Score After Bankruptcy-Part 9

Options If Your Chapter 13 Case Gets Dismissed?

Chapter 13 cases often get dismissed for a variety of reasons including failure to make payments, failure to turn in paperwork, failure to cooperate with the Chapter 13 Trustee, multiple filings, etc., so what should you do if this happens to you?

1. Get your case reinstated. This is often easy to do if it is a technical issue like paperwork, or attending a 341 meeting. Do whatever it takes to get your case confirmed so eventually you will get the fresh start you so sorely need.
2. If you can’t afford your current payments: Talk to your attorney and request he do a modification or sometimes the Chapter 13 Trustee will let you pay out a delinquency over a period of time. Don’t ignore the problem. Deal with it head on because you need a discharge if you are ever going to get your credit score back up.
3. If you absolutely can’t afford any Chapter 13 Payment. In this case you should request your attorney to convert your case to one under Chapter 7. This may or may not be possible depending on your personal income situation, but if you truly couldn’t afford the chapter 13 payments then you may qualify. Once you convert, in a few months you will have your discharge.
4. If you can’t reinstate or re-file your case. Then your final option is to contact each creditor and try to settle with each for less than the full balance. Often you can get them to take 25-50% or less if you make them understand how dire your situation is. If you make an agreement, be sure it is in writing and the creditor agrees to delete the negative credit reporting or at least show the status as “Settled” and “Balance -0-.” It would be better to hire an attorney to help you negotiate but that isn’t required. Many debtors do it themselves because attorneys are expensive. Just be careful and put everything in writing, if you decide to do it yourself.
5. Settle the claim: If you settle and a creditor doesn’t report the settlement properly to the credit bureaus, dispute it. It is dangerous for a creditor to verity false reporting as it then becomes a Fair Credit Reporting violation.  If the creditor doesn’t verify it within 30 days the adverse reporting will go away. If it is verified, you may then have a valid claim against that creditor.
6. Reinstate or Re-file: By far the best thing to do if your case is dismissed is to get it reinstated or re-file it. Obtaining a bankruptcy discharge is by far the best way to get your credit score jump-started back up where it belongs, so you can get your life back on track.

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