Discharged debts must be reported to the credit reporting agencies a certain way and for a certain period of time. When you file a petition for bankruptcy protection, you will usually receive a discharge at the end of the bankruptcy. Any debts which are discharged means you no longer have to pay them. Creditors are prohibited from trying to collect on debts that have been discharged.
Time Frame
When a debt is discharged through the bankruptcy court, it will remain on your credit report for a period of seven years from the date your bankruptcy was filed. If a discharged debt shows up on your credit report after the seven-year time frame has elapsed, contact the credit reporting agency by written correspondence and have them correct this information for you.
Zero Balance
Any debt that is discharged should be reported on your credit file with a zero balance. Discharged accounts should not reflect a past due amount. If any account is reported incorrectly on your credit report, contact the credit reporting agency and dispute the item. Send a letter to the reporting agency and let them know the debt has been discharged and should be reported as such.
Types
Some of the debts that are usually dischargeable include medical bills, personal loans, credit cards, business debts, repossession deficiency balances, leases and judgments. There should be a notation on your credit file that indicates a debt has been discharged.
Active
Discharged debts should not show up on your credit file as active accounts because they will continue to accrue late payments, which will damage your credit score by lowering it. Credit scores can range from 300 to 850, and are used by lenders to determine the likelihood that someone will default on a loan.
Credit Report
Get a copy of your credit report every year. There is a website you can visit that will allow you to order a copy, free of charge, from all three credit reporting agencies--TransUnion, Experian and Equifax. You can put your request in writing, order online or you can request copies over the phone. If you go online to order a copy, you will also be able to see a copy of your report online. Checking your credit file periodically will allow you to see if there are reporting errors.
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