While filing for bankruptcy can help you to make a fresh start, you should always keep a copy of the documents associated with your filing. You should also keep documents related to any financial transactions that may arrive once your bankruptcy petition has closed. A recent case involving Countrywide Home Loans Inc. is a good example of where these documents could come in handy.

If you had a home loan through Countrywide Home Loans Inc, and you had your home foreclosed, particularly through the bankruptcy process, then you may be eligible for compensation. The FTC has successfully brought an action against Countrywide Home Loans Inc. (now part of Bank Of America) for unfair practices and charges that were applied to those whose homes were foreclosed. There is now a compensation pool of $108 million available to pay those who were affected by their actions.

It can often take many years for problems to surface, and for action against lenders to complete, before any form of compensation is available. By then most people have moved on and much of the paperwork associated with loans, foreclosures and bankruptcies discarded or lost. Yet that paperwork can make the process of making a claim much easier. If you engaged a lawyer when filing for bankruptcy, then they will have copies of much of the paperwork involved, and this could also make filing a claim for compensation easier. In the case of  Countrywide, the actions deemed to be illegal or unfair generally occurred after bankruptcy, not prior or during, so most lawyers wont have copies of any paperwork such as letters or documents sent to debtors by lenders.

For many people, the best way to make a fresh start is by ridding themselves of the paperwork that got them into financial difficulties in the first place. Our advice – don’t, keep every scrap of paper that relates to your bankruptcy petition, and to any lender associated with loans that were dealt with during the bankruptcy process. You just never know when that paperwork will come in handy.

Footnote: if you did have a loan with Countrywide Home Loans Inc, and you filed for a Chapter 13 bankruptcy after 2005, then consult a lawyer. You may be eligible for compensation.

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