Confused on Backruptcy on Credit report?

Confused on Backruptcy on Credit report? by Lisa (California) on June 14, 2012 @13:39

Hi fellow landlords!

I have a seemingly nice, responsible tenant. I've run her credit and I'm confused by what I'm seeing.

In 2005 there is a Bankruptcy listing. It says "Chapter 7 Bankruptcy Discharged" and the amount says $0.00 and liabilities says $0.00. This was in 2005.

I am of course asking the tenant to provide more info. But shouldn't there be an amount that was discharged?

All the accounts are paid as agreed and she has a 737 credit score, which is good. None of the accounts listed say discharged in bankruptcy.

I'm just trying to confirm that "discharged" means it was filed and debt was discharged, and if it's normal for there to be no dollar amount there.

Also, Since this was 7 years ago and she's had good credit since, I'm leaning towards renting to her and want see if other landlords agree.

This is for a studio apartment on my property.

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Re: Confused on Backruptcy on Credit report? by Jack Klein (NY) on June 14, 2012 @13:54	[ Reply ]

Discharged means it was approved and finalized by the bankruptcy court. Although it says $0., there most certainly was a monetary amount filed for bankruptcy protection, but for some reason, it was not recorded. I am glad to see this rental applicant now has some good credit worth protecting. Good luck!

Re: Confused on Backruptcy on Credit report? by A.T.SF (CA) on June 14, 2012 @14:31	[ Reply ]

Debts discharged in bankruptcy should be listed in the credit report as having a zero balance, meaning you do not own anything on the debt. Debts incorrectly reported as having a balance owed will negatively affect your credit score and make it more difficult to get credit. You should check the credit report after the bankruptcy was discharged and file a dispute with the credit reporting agency if this information is not correct. A zero balance indicates that creditors accepted the courts order without dispute.

Re: Confused on Backruptcy on Credit report? by Anonymous on June 14, 2012 @16:55	[ Reply ]

Who cares how much it was for. She has a good credit score since having her BK discharged seven years ago. What's the hold-up? What matters is what has happened in the last seven years. That's a long enough time for redemption, don't you think?

Re: Confused on Backruptcy on Credit report? by K (GA) on June 15, 2012 @09:08	[ Reply ]

If I were considering this tenant, I would give credence to the seven years of good credit and the 737 score. It may help you to know that the law prohibits filing bankruptcy more than once in a 10 year period. So, for the next three years at least, she cannot file again. My own parents declared bankruptcy after a medical malpractice injury caused my father's leg to be amputated, which made him unable to work in his own business. Yes, he could find other types of work, but what about the business loans, building, inventory, employees, etc.? All that to say, financial disasters can happen to honest hardworking people, and sometimes bankruptcy is the only option to just stay off the street. It is not an easy out for lazy people. I lived it as a teenager, and it was hell. I think the seven years of good credit says a lot. We rented our home to a family who had been foreclosed on but had excellent credit on their car loans and other obligations for many years. For nearly two years, they've paid every month on time. Good luck, K