One of the things I tell clients about life after bankruptcy and rebuilding their credit, is that information about your post-bankruptcy payment history makes up 35% of your credit score.  Therefore, it is only natural that they will think that timely mortgage payments going forward will help them raise their scores after bankruptcy.  Unfortunately, that is not the case.

Mortgage companies do not report payment histories because, although the mortgage lien remains in place, and the bank will foreclose if you do not make the payments, your personal responsibility to pay the mortgage was discharged in the bankruptcy.  Thus the mortgage banks are fearful that any reporting on payment history implies that you still owe the debt, when you do not.  The only exception to this is if you were to reaffirm the mortgage as part of your bankruptcy.  This removes the debt from the bankruptcy discharge, and it is not something I recommend to my clients, especially if they owe more than their home is worth.

Many banks tell people to have their lawyer reopen their bankruptcy to reaffirm the debt to fix it, but the downside of this far outweighs the possible advantage to rehabilitating your credit score.  There are other ways to do this, including your payment history on a reaffirmed car loan, car lease, or secured credit card.  If you are considering bankrutcy or have already filed, contact my office to get more information about rebuilding your credit.

The Law Office of Steven J. Richardson serves New Jersey, including:  Gloucester, Camden, Burlington, Salem, Cumberland and Atlantic Counties and surrounding New Jersey communities, including Woodbury, Colonial Manor, North Woodbury, Woodbury Heights, Deptford, Thorofare, Gloucester City, Washington Township, Blackwood, Brooklawn, Westville and Pitman.

Richardson Law Offices
40 Newton Avenue
Woodbury, NJ 08096
Phone: (856) 686-9910
Fax: (856) 686-9911