Secrets To Removing Bankruptcies
Founder/CEO of CreditRepairCloud, an Inc. 5000 Company, former TV personality in USA/UK
Depending on the type of bankruptcy you have, after 7-10 years, it will officially fall off your credit report.;
;But what if you or your client wants to remove it early?;
;Removing a bankruptcy early can be life-changing, because it opens up all the possibilities to things like qualifying for a mortgage and a car loan. Plus, if the bankruptcy is wiped out from your record, you can qualify for lines of credit without the predatory, high interest rates that keep people with a bad credit history stuck in a downward spiral of debt.
;One mistake does not have to affect your life for the next ten years.
Removing bankruptcy can be a long and tedious process, but it is definitely worth trying, because getting one removed is AWESOME!;
So heres what you need to know:;
- Bankruptcies are filed with the courts, NOT with the credit bureaus
- And the courts dont even report to the credit bureaus
- But they still show up on your credit report!
Thats because the credit bureaus BUY this information. They purchase this information about bankruptcies from companies like LexisNexis, who pull the information from PACER.;
This is the key to removing it, and heres the reason why:
This is considered false reporting, which is a violation of the Fair Credit Reporting Act, and a GREAT reason to remove a bankruptcy or any public record.
So how can YOU use that technicality to remove public records from reports?;
Contact Our Skilled Bankruptcy Lawyer Today
If you are overwhelmed by debt and want to learn more about your bankruptcy options, Attorney Jerry E. Smith can help. Our firm is an affordable, compassionate team of bankruptcy specialists who can help you walk through the process with hope and confidence. Weve helped hundreds of clients get a fresh start and find a brighter future. To find out more, call us for a free one-hour initial consultation at 917-8680. We offer weekend and evening appointments as well as same day filings if possible.
Send A Dispute Letter
Send a dispute letter and ask them to correct the mistake and remove the bankruptcy.
If you cant find any inaccuracies, you might try sending them a dispute letter anyway.
Ask them to verify how the bankruptcy came to be on the report.
They will likely respond that they received the information from the court, and provide the relevant information.
You can then follow the same process with the court. The hope is that one of these steps will expose some kind of problem or technicality that occurred during the process and will ultimately be grounds for removal.
Im a firm believer in the notion that nothing is impossible.
It may be highly unlikely that youll be able to remove a legitimate bankruptcy from your credit report early, but that doesnt mean it isnt worth trying.
Its definitely a long shot. However, many people who have taken the time to go through the process have had success with removing a Chapter 7 from their credit report before the 10 years were up .
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How To Remove Items From Your Credit Report In 2021
Weve outlined how to remove negative items from your credit report, the paid services you can opt to use, and additional information to have on hand. It is important to clarify that only incorrect items can be removed. If youve done this already, but your credit score is still low, you will need to repair bad credit over time. Although accurate items cannot be removed by you or anyone else, there are still many credit report errors that can damage your score, and these are worth looking out for.
Review Your Credit Reports For Any Errors
Start by reviewing your credit reports and looking for ANY errors regarding your bankruptcy.
By law, you’re entitled to a free copy of your credit report once every 12 months, and you can request your free report by visiting www.annualcreditreport.com.;
Once you have your credit report, check it over for accuracy.
You want to look for any type of error: a misspelling of your name, an incorrect address, the wrong account number, the wrong date, etc.
Basically, any type of technicality that you can use in order to bring on a dispute.
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Tips To Help Rebuild Your Credit After Bankruptcy
If youve already felt the wrath of bankruptcy, chances are youre not feeling too optimistic about your future credit score. However, the good news is filing for bankruptcy wont haunt you forever, and the odds of rebuilding your credit are definitely in your favor.
Of course, having the bankruptcy removed from your credit report is the easiest way to get your credit back on track in the shortest period possible. You can also take the following actions to boost your score:
How To Build Your Credit After Filing For Bankruptcy
If you are one of those people who want to swear off credit altogether, this is actually a bad idea. You want to rebuild your credit score after bankruptcy even if you dont have any immediate plans on making big purchases. This is because when you have a good credit score, it gives you access to better deals and savings. You dont have to pay deposits or high-interest rates when getting necessary services like utilities and cell phone plans.
So, how can you rebuild credit without going under debt again? Here are some practical tips.
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Send A Letter To The Court Administrator
If the credit bureaus claim they verified their information with the bankruptcy court, you can also write the court yourself, asking the court administrator about its procedure for verifying records with the credit bureaus.
When you do this, be sure to include a self-addressed stamped envelope to increase your chance of getting a response.
When you contact the bankruptcy court, you might have to dig a little bit to find the right department and address for your letter.
Start by visiting the court’s website, and then look for any tab or menu item that says “clerk’s office” or “clerk of courts.”
The court’s website should list phone numbers for various departmentsdon’t hesitate to call around to make sure you’re sending your letter to the correct department. ;
Depending on which court you’re dealing with, you might receive any number of responses.
But the bankruptcy courts say they don’t verify bankruptcy information with the credit bureaus. Instead, the courts post bankruptcies on their dockets, which are public records.
In short, if a credit bureau claims it “verified” your bankruptcy with the court, this almost certainly isn’t true.
If you can get a letter from the court saying as much, you might have a chance of getting the credit bureau to remove your bankruptcy.;
How To Reestablish Your Credit
After declaring bankruptcy, you’ll want to look at ways you can earn a score in a range that will qualify you for better financing options and that begins with rebuilding your credit.
You may not be able to immediately qualify for the best credit cards, but there are others that apply to people with less-than-stellar credit.
Secured credit cards require a deposit that acts as your credit limit. If you make your credit card payments on time and in full on this new secured card,;you then have a greater chance at qualifying for an unsecured credit card in the near future.
The Capital One® Secured has no annual fee and minimum security deposits of $49, $99 or $200, based on your creditworthiness. Those who qualify for the low $49 or $99 deposits will receive a $200 credit limit. Cardholders can obtain a higher credit limit if they make their first five monthly payments on time.
The Citi® Secured Mastercard® is another option with no annual fee. There is a $200 security deposit required, which would mirror your credit limit. Cardholders can also take advantage of Citi’s special entertainment access, which provides early access to presales and premium seating for concerts and games.
Once you add this new credit car, make sure you pay your monthly bills on time and in full to quickly work your way toward better credit.
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Negative Information On Your Credit Report Is Treated Differently
According to Experian, one of the three credit bureaus, specific accounts that are delinquent when included in a bankruptcy will be deleted seven years from the date you were initially late with your payment.
This falls in line with the way all negative information, including late payments, are dealt with when it comes to your credit reports. Generally speaking, negative marks like late payments and accounts in collections will stay on your credit reports for seven years before falling off automatically.
How Long Does Bankruptcy Affect Your Credit
Getting in trouble with too much credit card debt
Some of the most significant debt among American households is .; The average credit card debt per U.S. family is $6,270.; Overall, Americans owe;$807 billion;across almost;506 million;card accounts, according to ValuePenguin by Lending Tree.; The average credit card debt among borrowers in Indiana is $4,651.; Hoosiers tend to be some of the lowest debt-holders in the nation, coming in at 45th among all 50 states.; Alaska and Connecticut residents hold the highest credit card borrower debt.
Bankruptcy can affect your credit for quite some time after a bankruptcy is discharged. However, there are some things you can do to position yourself favorably to start rebuilding a good credit history. First and foremost, avoid taking on any new substantial debt. Dont dig a new hole after getting out of the old hole. Taking on small, modest debt over time can help you build your credit score by making payments regularly and on time.
MyFICO.com offers some helpful tips about minimizing the negative effect of bankruptcy and how to revive your credit after hard times.
Some of these tips are:
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Can A Bankruptcy Come Off My Credit Report Early
A legitimate bankruptcy record cannot be removed from your credit report, but a bankruptcy can come off your report if it is inaccurately entered or otherwise incorrect.
The FCRA makes provisions for challenging anything on your credit report that is incorrect, has remained on your credit report beyond the maximum time allowed, or cannot be substantiated by the creditor who reported it.
In the case of bankruptcies especially because they remain on the credit report for so many years its not uncommon for errors to creep in.Some of the most common errors we find include:
- Debts that were discharged in the bankruptcy are still showing a balance.
- Individual accounts included in the bankruptcy are still appearing on the report after seven years. In both Chapter 7 and Chapter 13 bankruptcies, the individual affected accounts can only impact your report for seven years starting from original delinquency date, not the filing date of the bankruptcy in which they were discharged.
- The bankruptcy is still showing up on a report more than 10 years after the filing date.
- Any sort of material error in how the bankruptcy was reported, from the spelling of names to accurate addresses, phone numbers, dates, etc.
If any of these or other errors appear on your credit report, you have the right to challenge those errors. The reporting agency must remove them if the reporting agency cannot substantiate the item.
Diy Vs Professional Credit Repair
It can often feel like credit repair is a catch-22. You may not have a lot of expendable income to hire a professional credit repair company, but you likely dont have the know-how or emotional bandwidth to tackle it yourself either. We get it.
Bankruptcy is the negative item we most encourage our readers to get professional help with though. The steps weve outlined are advanced tactics that in most cases are best left to credit repair specialists. They are more familiar with the ins and outs of the credit bureaus and court systems, as well as the steps well be outlining.
Below are the credit repair companies we recommend.
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Path To Credit Recovery
If you are avoiding talking to a bankruptcy trustee because you are concerned about how your credit will be affected, its important to consider two factors:
If debt is holding you back from rebuilding your credit, talk with a Licensed Insolvency Trustee about how to eliminate; your debt. We provide free, no-obligations consultations during which we will conduct a full debt assessment and provide you with options to get out of debt so you can build a stronger financial future.
Become An Authorized User On A Credit Card
If you dont want to take out a secured credit card, you can ask a family member or friend who has good credit to add you as an on one of their credit cards. You may see an increase in your credit score if the issuer reports the cards positive payment history to the three main credit bureaus. However, your score could take a dip if the primary cardholder makes a late payment or maxes out their credit limit.
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How To Remove A Bankruptcy From Your Credit Report Early
By Mike Pearson
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If you’re trying to remove a bankruptcy from your credit report early, you can do so by following these five steps:
- 1Review your credit reports. Check to see if there are ANY errors on your credit report regarding the bankruptcy.;
- 2File a dispute. Dispute the bankruptcy with the credit bureau while making sure NOT to admit any fault.;
- 3File a verification request. If the denies your dispute, make them verify their information about your account is accurate.;
- 4Send a letter to the court administrator. Follow up with the court to make sure the credit bureau actually verified your bankruptcy.;
- 5Follow up with the credit bureau. Send a letter to the credit bureau saying the court was unable to verify your account records, and request another deletion.
We’ll dive into this process in much greater detail and also look into what else you can do if a bankruptcy is dragging down your credit.
Follow Up On The Verification
Next, if the dispute process doesnt work, its time to follow up with the credit bureau again. This time, however, youre going to send a procedural request letter.
What exactly is that?
Its a letter that asks the credit bureau who they verified the bankruptcy with. In most cases, the bureau will state that they reached out to the actual court system.
But heres the catch.
Courts typically dont verify bankruptcies for any type of credit agency. Heres where the next step comes in.
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How Long Until Bankruptcy Falls Off Your Credit Report
Talk to different bankruptcy attorneys and credit professionals, and youre sure to get just as many answers about the length of time the bankruptcy stays on your credit report before it is removed.
According to Experian, the credit reporting agency:
The bankruptcy record from the court is deleted either seven years or 10 years from the filing date of the bankruptcy depending on the chapter you declared.
Chapter 13 bankruptcy is deleted seven years from the filing date because it requires at least a partial repayment of the debts you owe. Chapter 7 bankruptcy is deleted 10 years from the filing date because none of the debt is repaid.
Individual accounts included in bankruptcy often are deleted from your credit history before the bankruptcy public record. Usually, a person declaring bankruptcy already is having serious difficulty paying their debts. Accounts are often seriously delinquent before the bankruptcy.
All delinquent accounts are deleted seven years from the original delinquency date, which is the date the account first became delinquent and was never again current. Declaring bankruptcy does not alter the original delinquency or extend the time the account remains on the;credit report.
If the account was delinquent before being included in the bankruptcy, it will probably be deleted before the bankruptcy public record because the original delinquency date is typically earlier than the bankruptcy filing date.
How Does Filing For Bankruptcy Impact Your Credit Score
Bankruptcies are one of the most detrimental items that can appear on your credit report. Like judgments and tax liens, they report as a public record and tank your credit score.
If your credit profile was stellar and you had a high FICO score prior to filing for bankruptcy, you should expect a huge drop in score, according to myFICO. But if your credit was already in the trenches due to the presence of negative items on your report, you would probably only see a modest drop in score, the article adds.
The more accounts included in the bankruptcy filing, the greater the impact on your score. Why so? These accounts will report for seven years from the original date of delinquency. And the impact is the same even if they get discharged through bankruptcy.
Your credit score will start to bounce back over time, and it may not take as long as you think. This is due to the fact that discharged debts are no longer owed. This means your credit utilization ratio will now be much lower. And since amounts owed account for 30 percent of your credit score, you will start to see small increases as creditors update the balances.
But if can get the bankruptcy removed from your credit report, that means good news for your credit score much sooner than later. More on that shortly.
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