Q: does reopening bankruptcy discharged in 2011 to motion avoid lien affect credit or bankruptcy falling off credit report?
I need my ex-wife to clear a judgement lien from my house but she won't if it resets the waiting period until the date she can borrow more money.
A:
The reopening of a case does not change the date of the filing of the bankruptcy nor does it change the discharge date. Your ex-wife's problem with her credit is much greater than a 2011 bankruptcy. I have clients that follow my advice that have a credit score in the high 600s (675 to 680) in two years and over 700 in three years. I have had clients that buy and get long term low interest home mortgages 2 years after a bankruptcy discharge.
Below are some pointers on rebuilding credit after discharge. Show this to your ex-wife:
1) Pull a 3 bureau credit report approximately 2 months after discharge and make sure that all discharged debt shows up as "included in bankruptcy" and shows a $0.00 balance. If not, go to experian.com, transunion.com and equifax.com and search for dispute on each site for how to dispute the improper entry.
2) Build your credit score by making and paying loans timely. Do not do this by going to finance companies and paying high interest rates. One type of loan that can be made easily at a small cost to you is one that uses the money you borrow as collateral. This is done by placing the borrowed funds in a savings account at the same bank with the bank placing a hold or lien on the savings account. The interest rate will be very low because the bank has no risk. Even though it may seem like you are paying a monthly payment, most of the money you are paying is going to principal. At the end of the 6 months, you should have the bank use the savings account to pay off the loan, resulting in a paid as agreed, paid off loan on your credit report. Since most of the payment was paid to principal, you will have almost as much money in your savings account when the loan is paid off as you paid in loan payments over the 6 months.
3) Do not over extend yourself with credit. For example $500.00 owed on a $500.00 limit credit card brings down the credit score. Also, creditors look at your debt to income ratio when determining if you qualify for a loan.
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