Errors In A Report Take Action To Correct Them
If a bankruptcy filing appears with errors, immediate action should be taken to have it removed. Errors may include clerical mistakes such as a miss-transposed Social Security number, or misrepresentations due to identity theft or mistaken identity. Any case of inaccuracy on a credit report should be reported to the agency immediately and in the case of identity theft, an additional fraud alert should be placed on the report.
Are All Of The Debtor’s Debts Discharged Or Only Some
Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code. Section 523 of the Code specifically excepts various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable for public policy reasons .
There are 19 categories of debt excepted from discharge under chapters 7, 11, and 12. A more limited list of exceptions applies to cases under chapter 13.
Generally speaking, the exceptions to discharge apply automatically if the language prescribed by section 523 applies. The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated, debts owed to certain tax-advantaged retirement plans, and debts for certain condominium or cooperative housing fees.
In Most Chapter 13 Bankruptcy Cases You Cannot Finish Your Chapter 13 Plan Early Unless You Pay Creditors In Full
Updated by Cara O’Neill, Attorney
If you’re in the middle of a Chapter 13 bankruptcy, and your financial picture starts looking rosy, it’s understandable that you’d want to pay off your repayment plan earlybut don’t count on being let out of your plan. In fact, it’s more likely that your monthly payment will increase because your creditors are entitled to all of your discretionary income for the duration of your three- to five-year repayment period. In this article, you will learn why it’s easier to end your Chapter 13 plan early if you have a financial setback than it is when your finances improve.
Want step-by-step bankruptcy guidance? Read What You Need to Know to File for Bankruptcy in 2021.
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To Remove A Bankruptcy From Your Credit Report Youll Need To Find Evidence That The Bankruptcy Was Reported Incorrectly Otherwise It Will Only Come Off After Seven Or 10 Years Depending On The Type Of Bankruptcy
Beyond the stress and inconvenience that comes with filing for bankruptcy, it can have a long-standing impact on your credit report and score.
Fortunately, that negative impact can be mitigated with the right help.
How Long Does Bankruptcy Stay On A Credit Report
The most common type of bankruptcy about 70% of those filed each year is Chapter 7 bankruptcy and it remains on your credit report for 10 years. The other type, Chapter 13 bankruptcy, clears from your credit report after seven years.
Chapter 7 lasts longer on your record because, after you liquidate assets and pay what you can, the rest of the debt is written off. Chapter 13 bankruptcy involves a plan to continue paying off at least part of your debt in three to five years, so it leaves your credit report sooner.
Getting the bankruptcy removed from the credit report early wont happen simply because you dont want it there. It requires proving that it didnt belong there in the first place, meaning that it is the result of identity theft or a clerical mistake that you can prove to be the case.
If you find a fraudulent bankruptcy on your record, you need to challenge it with all three credit bureaus Equifax, TransUnion and Experian by filing a . The Fair Credit Reporting Act requires that the agencies investigate and resolve your dispute within 30 days. To maintain evidence supporting the start of that 30-day deadline, informing the agencies by certified mail is recommended. The credit bureaus will notify you of their findings.
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Check Your Credit For Inaccuracies
You need to look for any inaccuracies that may be part of the bankruptcy entry. You will want to look very carefully for any mistake.
- Identity information
- Accounts that may belong to another person with the same or similar name
- Incorrect accounts that occurred from identity theft
- Closed accounts reported as open
- You are reported as an owner of an account but are only an authorized user
- Accounts incorrectly reported as late or delinquent
- Incorrect date opened, date of last payment, date of delinquency
- Same debt listed more than once
- Accounts that appear multiple time with different creditors listed
- Incorrect current balance
- Incorrect credit limit
There may be other inaccuracies you find as well the important part is to look closely and pay attention to detail.
If there are any inaccuracies, you simply dispute the bankruptcy entry with the credit bureaus, saying the information is incorrect and therefore should be removed.
Dispute via letter with the mistakes explained and make sure to send to each bureau. If there are no inaccuracies, move on to the next step.
What Is A Discharge In Bankruptcy
A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.
Although a debtor is not personally liable for discharged debts, a valid lien that has not been avoided in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.
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You Cannot Remove A Legitimate Bankruptcy
A common misconception is that a legitimate bankruptcy can be removed from a credit report before the time allowed by law, which is usually 7 or 10 years depending the chapter. There are numerous so-called credit repair companies advertising that they can get bankruptcies and other negative credit items removed from a credit report for a fee. However, according to the Federal Trade Commission , it is not possible to remove accurate negative information from a credit report. Nevertheless, as discussed below, there are ways to reduce the duration that a filing is reported. There are also options to remove a bankruptcy filing if an error is involved or if the debtor was the victim of identity theft.
Why Credit Repair Isnt The Way To Go
Under the Fair Credit Reporting Act, a credit reporting agency has the right to report any information that is truthful and accurate. That includes the fact that you filed for bankruptcy.
If theres inaccurate information on your credit report, you can dispute those errors and demand that the credit reporting agency conduct an investigation. If the investigation reveals that youre correct then the inaccuracy should be removed from your credit report.
In the case of bankruptcy, reporting it on your credit report is accurate. Trying to remove it by saying that its inaccurate is a lie. You wouldnt be disputing an inaccuracy, youd be trying to game the system.
Thats what so many of the do try to game the system in an effort to get the credit reporting agency to remove the bankruptcy from your record by disputing over and over again.
Sometimes it works, but its not permanent. Eventually the bankruptcy will reappear on your credit record because the court record section of your credit report is updated regularly.
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Hire A Reputable Credit Repair Company
Are you uncomfortable with the dispute process or strapped for time? It may be worthwhile to hire an experienced, reputable credit repair company to do the legwork for you. They possess the knowledge to work towards having the bankruptcy removed in the shortest amount of time possible. Reputable credit repair companies will also address other negative items on your credit report to give your score the best possible chance of recovering from the damages sooner than later.
How To Get A Judgment To Show Settled
Although they sound similar, a bankruptcy dismissal and a bankruptcy discharge are two very different outcomes. If your bankruptcy ends in a dismissal, it means that the bankruptcy was dismissed before the conclusion. A dismissal can be voluntary or involuntary. The court can order the dismissal because of a failure to comply with proceedings, or you might even change your mind for a voluntary dismissal. If you have a bankruptcy dismissal, write a letter to have a dismissed bankruptcy removed from your credit reports.
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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.
Can You Remove A Bankruptcy On Your Own
Like all negative item disputes, its entirely possible to complete the process on your own. However, removing a bankruptcy from your credit report early can be a lengthy and tedious process that doesnt guarantee results.
You can dispute the bankruptcy either by stating an inaccuracy of the information on your credit report or by asking the credit bureau how it verified your bankruptcy. As with any dispute, they must respond to your procedural request letter within 30 days.
In most cases, theyll say that they verified it with the courts, but this is unlikely. You must then contact the court to ask how they verified your bankruptcy.
If they respond that they never verified it, you should get that statement in writing, send it to the credit bureau, and ask them to remove the bankruptcy.
This method isnt guaranteed, but it might be worth trying. Otherwise, enlist the help of a credit repair company to navigate the process for you.
Credit repair companies are highly experienced at disputing negative items on your credit reports. They specialize in getting bankruptcies deleted from your credit report. They also work to remove other negative information included in the bankruptcy, like charge offs and collections.
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Accounts Included In The Bankruptcy
After youve filed for bankruptcy, the accounts included in your bankruptcy will show up as included in bankruptcy on your credit report. Most of them will remain on your credit report for seven years. These include accounts like charge offs, collections, repossessions, and judgments. They can also potentially be removed from your credit report before the reporting limit of seven years.
Can The Discharge Be Revoked
The court may revoke a discharge under certain circumstances. For example, a trustee, creditor, or the U.S. trustee may request that the court revoke the debtor’s discharge in a chapter 7 case based on allegations that the debtor: obtained the discharge fraudulently failed to disclose the fact that he or she acquired or became entitled to acquire property that would constitute property of the bankruptcy estate committed one of several acts of impropriety described in section 727 of the Bankruptcy Code or failed to explain any misstatements discovered in an audit of the case or fails to provide documents or information requested in an audit of the case. Typically, a request to revoke the debtor’s discharge must be filed within one year of the discharge or, in some cases, before the date that the case is closed. The court will decide whether such allegations are true and, if so, whether to revoke the discharge.
In chapter 11, 12, and 13 cases, if confirmation of a plan or the discharge is obtained through fraud, the court can revoke the order of confirmation or discharge.
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The Legal Process Of Removing Bankruptcy Errors
You can challenge any error you find on your credit history or bankruptcy filings. They must be removed if the credit bureau or reporting agency cannot prove they are legitimate.
To prove there is a mistake, you need to follow these steps:
Proving bankruptcy fraud can be drawn-out and time-consuming. A legal advocate can help reduce stress and save time throughout the process.
Hire A Credit Repair Specialist To Deal With The Bankruptcy
This is obviously a lot of work, and it may seem a bit overwhelming. You may feel like its too much to handle with everything else going on in your life.
In that case, you may want to procure the services of a quality credit repair company. You could also hire a good bankruptcy attorney.
Granted, its never a good feeling when you pay out of pocket to fix something that wasnt your fault.
Taking it on by yourself can be a big challenge, though. It will cost you in terms of time and money.
Someday, fraud and cybercrime might be a thing of the past. But, for now, its a part of life that many of us have to deal with at one time or another.
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Dispute Inaccurate Bankruptcies With A Credit Dispute Letter
The next step is to write a credit dispute letter detailing the inaccuracies you found on your credit report. This letter gives the credit bureaus an opportunity either to verify the information you believe to be incorrect or to remove the inaccurate report altogether.
Your letter should include the following information:
- Your account name and number
- The errors you identified
- The changes you would like the bureau to make
- A request to remove the damaging accounts if the bureau cannot verify the details
In the best-case scenario, the bureau will be unable to verify the information regarding your bankruptcy, forcing it to remove the information from your report.
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.
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Where To Get Legitimate Help
Just because you have a poor credit history doesnt mean you cant get credit. Creditors set their own standards, and not all look at your credit history the same way. Some may look only at recent years to evaluate you for credit, and they may give you credit if your bill-paying history has improved. It may be worthwhile to contact creditors informally to discuss their credit standards.
If youre not disciplined enough to create a budget and stick to it, to work out a repayment plan with your creditors, or to keep track of your mounting bills, you might consider contacting a credit counseling organization. Many are nonprofit and work with you to solve your financial problems. But remember that nonprofit status doesnt guarantee free, affordable, or even legitimate services. In fact, some credit counseling organizations even some that claim nonprofit status may charge high fees or hide their fees by pressuring people to make voluntary contributions that only cause more debt.
Most credit counselors offer services through local offices, online, or on the phone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.