The primary reason to file a bankruptcy is to eliminate, or at least restructure, your debts. The best way to find out about these debts in detail is to run a three-source credit report (which I can do in my office). So, it follows that you need to review your credit report closely to make sure it includes all of your debts (which you want to discharge).
A good credit report contains a wealth of information about your credit and finances. It will list creditors, creditor addresses, amounts owed, and debt limits. It will include old debts, debts closed out, and debts transferred. It will include information about your mortgage and your car payment. And, of course, it will include the number that Americans often obsess over... their credit score.
So, what to make of it all? If you are applying for a mortgage or a loan, you should focus on the credit score. It is determined by an algorithm meant to determine your credit-worthiness. Credit score is best left for discussion in another post. My focus today is reviewing your credit score for bankruptcy purposes.
The most important information, from a bankruptcy perspective, on your credit report is the creditor addresses. These address help your attorney serve the proper creditor departments so that your bankruptcy is recognized. The address on most correspondence with creditors is often just a correspondence or collections address. A good credit report includes addresses for legal and bankruptcy departments. This helps assure that your bankruptcy is properly processed by your creditor.
The amount owed is also important information on your credit report, especially when filing a Chapter 13 bankruptcy reorganization. This information helps your attorney estimate how much a repayment will be. The amount my clients believe they owe is often much less than the amount listed on the credit score, as they often do not take interest and penalties into account.
What to look for beyond the addresses and amounts? Medical bills.
Medical bills are often NOT reported to the credit agencies, and therefore do not show up on your credit report. You will want to review the report closely, and if these bills do not appear, gather up statements showing how much you owe towards these medical debts so that your attorney can include them in your petition. Remember... if they're not included, they're not discharged. It's especially worth tracking down these medical bills (all of them) in a Chapter 7. I have seen clients literally finds thousands of dollars in medical bills when I insisted they keep looking. It's worth the time, because if you do not include them, they can attempt to collect after the bankruptcy is discharged.
Also, you will need to inform your attorney of any personal debts, or debts owed to anyone that isn't a finance company, such as attorney fees. These debts will obviously not show up on a credit report. When in doubt... find the bill!
In review... read your credit report by focusing to make sure you have listed all of your creditors, especially medical bills. Second, make sure the amounts look correct, but don't worry too much about this, as your creditors will need to file exact claims if they wish to collect from you anyways.
Review that credit report closely! Make sure everyone is included!