How To Get Bankruptcies Removed From Credit Report

Can A Dismissed Bankruptcy Hurt Your Credit

Whether your bankruptcy is dismissed or your debt is discharged, the 3 major credit bureaus treat bankruptcies the same. That means even if your debts aren’t cleared by bankruptcy, your credit score can nose dive up to 200 points! It gets worse. It can stay on for up to 10 years. So what can you do?

Different Types Of Bankruptcies

There are many types of bankruptcy. The most common for individuals and small businesses are Chapter 7 and Chapter 13.

The differences between the two are essential to note. They determine your options for how to remove bankruptcies from credit reports. Ultimately, its the different maximum duration on your records and the repayment plans that determine how much your credit scores drop.

In both cases, it might be prudent to consult a bankruptcy lawyer or consultant. Legal advisors can help you to understand the details of each plan. Knowing the details of the type of bankruptcy can help in understanding how to contest the procedure. Plus, it will help you assess how bankruptcy affects your credit score in the long run.

Send The Courts Response To The Credit Bureaus

Send the statement from the court to the credit bureaus with a letter asking to have the bankruptcy removed. Mention that the bureau knowingly provided false information and has violated the Fair Credit Reporting Act.

If all goes well, removal of bankruptcy should occur.

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Hire A Credit Repair Company To Help

If you’d rather save yourself the time of going through this entire process yourself, you may want to look into hiring a professional company to help you do it.

Take a look at our review of the best credit repair companies.

Keep in mind that these companies charge a fee for their services, so you’ll need to factor cost into your decision.

Reporting Debts As Discharged In Bankruptcy

While it might be daunting to think about a bankruptcy filing showing up on your for ten years, it might not be as bad as you think. A bankruptcy discharge can help you clean up debt much faster than you’d be able to do yourself.

For instance, instead of a delinquent or unpaid debt lingering on your report for years, it will show as being discharged as part of your bankruptcy. In fact, creditors won’t be able to report your debt in a variety of ways that could cause your credit to suffer, such as allowing the obligation to show as:

• currently owed or active
• having a balance due, or
• converted to a new type of debt .

Such reporting labels are often the reason creditors deny applicants credit. In some cases, applicants must pay off such debt as a condition of loan approval. Instead, when you pull your report, each qualifying debt should be reported as:

• having a zero balance, and
• discharged, “included in bankruptcy,” or similar language.

Unfortunately, some creditors don’t update information to the credit reporting agencies. This tactic could be a way to get you to pay up, even though you no longer legally owe the debt. If your credit report shows an improperly labeled discharged debt, you’ll want to take steps to correct the problem.

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Discharge Date Vs Reporting Timeline

The length of time that the bankruptcy reports depends on the type you file. The rules are as follows:

• Total Discharge or Chapter 7- up to 10 years from the date of filing
• Reorganization or Chapter 11- up to 10 years from the date of filing
• Repayment Plan or Chapter 13- completed bankruptcies usually takes 3 to 5 years)- up to 7 years from the date of filing

But individual accounts included in the filing report for seven years. This is the case even if you filed under Chapter 7 or 11.

How To Remove Items From Your Credit Report In 2022

Your credit report is meant to be an accurate, detailed summary of your financial history however, mistakes happen more often than you may think.

Whether its accounts that dont actually belong to you or outdated derogatory information thats still being reported, incorrect information could be bringing your score down unnecessarily.

Read on to learn how to remove erroneous information from your credit report and some tips on how to handle those negative items that are dragging your score down.

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Active military members also qualify for a one-time $50 discount off the initial fee.

How To Remove A Bankruptcy From Credit Report

*This is not a financial advice article. Speak to a professional financial advisor if needing financial assistance.

Your credit report is a valuable tool that lenders and other financial entities use to determine your financial responsibility. Unfortunately, filing for bankruptcy can negatively impact your credit report and knock your credit score down by several hundred points.

In most cases, a bankruptcy will remain on a credit report for several years following the filing date, continuing to affect your credit score for about a decade. However, if your bankruptcy record has mistakes, due to identity theft, or is an error, you may be able to have it removed from your credit report early.

Continue reading to find our step-by-step guide to attempt to remove a bankruptcy from your credit report, then read our tips about how to potentially rebuild your credit following a bankruptcy filing.

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Obtain Copies Of Your Credit Report

The first step in this long process is to get your hands on a copy of your report. Everyone is entitled to a free copy from the major credit bureaus each year, which totals to at least three. Plus, depending on who you have financial relations with, some companies can offer you even more free copies.

In addition to getting copies of your reports from the bureaus, you may also want to get a copy of your financial information from LexisNexis. And, you will want to head to the courthouse to get your public records from your hearing. Both of these things are public records, so you should not have to pay anything to access them. You may, however, have to pay to make or order copies of them. Once you have all of these copies, sit down and get ready for some reading. Next up is the key to how to get bankruptcies removed from a credit report.

File A Verification Request

If the credit bureaus claim that your bankruptcy is accurately reported, the next step is to make them confirm where they got their information about the bankruptcy.

Under the Fair Credit Reporting Act , the credit bureaus are required to tell you the source of their information when it comes to the items on your credit report.

In your letter or communication requesting verification, ask the credit bureaus to confirm the following information:

• Name and address of the courthouse
• Phone number of the courthouse they contacted
• Name of the person who verified the disputed information
• Any documentation used to verify the dispute

Chances are, the credit bureaus will claim they verified the bankruptcy with the court.

But here’s the thing: the federal bankruptcy courts explicitly state that they “do not provide information to the credit reporting agencies.”

We will use this bit of information to our advantage!

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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.

How Does Bankruptcy Affect My Credit Score

The impact of bankruptcy on a credit report can be devastating and entirely depends on your credit score prior to filing.

According to FICOs published Damage Points guidelines, the effects range from 130 to a 240 point drop. For example:

• A person with a 680 credit score would drop between 130 and 150 points.
• A person with a 780 credit score would drop between 220 and 240 points.

So, if your credit score was high, a bankruptcy would drop it instantly to the poor category. Starting with a good score, you likewise end up with a poor score, but your score does not plummet nearly as far.

The end result is still negative your and it will keep you from getting approved for new credit. The lower your initial score, the less drastic the impact.

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How To Remove Dismissed Bankruptcies From Your Credit Report Yourself

Removing dismissed bankruptcies from your is possible, but it is not easy. There are two ways you can go about removing bankruptcy information from your credit report:

To dispute a dismissed bankruptcy, you will need to gather as much of the following information as possible:

• Your name and address associated with the bankruptcy case
• The individual or business that filed for bankruptcy
• Court-related documents showing that the case was dismissed
• Date of dismissal

How Long Does Bankruptcy Take To Fall Off Your Credit Report

How long a bankruptcy takes to fall off your credit report depends on the type of bankruptcy that you filed. If you filed for Chapter 7 bankruptcy, it takes 10 years for it to fall off your credit report. However, if you filed Chapter 13 bankruptcy, it takes seven years from the date you filed for bankruptcy for the bankruptcy to fall off your credit report.

After waiting for 7 to 10 years, depending on the type of bankruptcy that you filed, the bankruptcy should be automatically removed from your credit report. If for any reason the bankruptcy remains on your credit report for longer, you should dispute it through the credit reporting bureaus to have it removed.

That said, if not enough time has passed since youve filed for bankruptcy, the credit reporting bureaus will refuse to remove it. They will remove it only if the prescribed time has passed or if there are any inaccuracies on your credit report.

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How Long Does A Bankruptcy Or Consumer Proposal Stay On My Credit Report

How long bankruptcy stays on your credit report in Canada will depend on the credit bureau that is reporting.

The largest credit bureau in Canada, Equifax, maintains this record on your credit report for a period from the date of your discharge or last payment:

• A first bankruptcy for six years from the date of your discharge.
• A second bankruptcy for 14 years.

The TransUnion web site states that they keep a bankruptcy on your credit file for six to seven years from the date of discharge or fourteen years from the filing date .

At this point the bankruptcy will leave the credit report and you will need to start to rebuild your credit.

How long a consumer proposal stays on your credit report again depends on the credit bureau that is reporting.

With Equifax, a consumer proposal is reported for three years after your last payment.

Removing A Bankruptcy From Your Credit Report

As stated above, it is challenging to get bankruptcies removed from your credit report, but not impossible. The duration of a bankruptcy on your credit score depends on the type of bankruptcy.

Chapter 7 has a maximum of ten years, and chapter 13 has a maximum of seven years. But, these are only maximums. Since there is no minimum, it is possible to get it removed from your record sooner.

Here is how to remove bankruptcies from credit reports yourself:

This guide offers a possible way to remove a bankruptcy record from your credit report. However, it is always best to verify these facts beforehand. Ensure the court you contact doesnt verify bankruptcy information with credit bureaus and always consider getting expert advice.

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Can I Rebuild My Credit After Bankruptcy

You can rebuild your credit after bankruptcy, but its a long process. Your options will be limited at the start, but it is key to not get discouraged. As time goes on, if you consistently pursue a credit rebuilding strategy, your reports and scores can improve.

Here are some recommendations to start with:

• Understand the cause: Identify, accept, and learn from the root causes of your bankruptcy so you wont find yourself in the same position down the road.
• Stick to a budget: Re-evaluate your finances and see where you can cut expenses and save more money if you can.
• Start establishing a new credit history: No, this does not mean using an alias . It means starting fresh with whatever credit you can obtain.

This may mean settling for an extremely high-interest rate, taking on a co-signer, depositing cash into a secured credit card, or other options that have been designed specifically to help you re-establish a positive credit record.

Use these credit options sparingly and never put more on a card than you can pay off by the end of the month so your credit improves over time.

Removing A Bankruptcy From A Credit Report On Your Own

Only the credit bureaus have the ability to remove an item from your credit report, including bankruptcies. If you dispute an item on your credit report and a credit bureau cant verify that its accurate, it must delete the account from your report.

However, disputed items can also be verified and remain on your report. It may help to have a professional guide you through your options if this happens to you.

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How Can I Rebuild My Credit After Bankruptcy

The most important thing you can do to improve your credit score after a bankruptcy is remove the bankruptcy from your credit report.

Equally important is learning and changing your personal finance habits so that it doesnt happen again. This might involve reviewing your income and expenses or building your emergency fund to prevent future financial hardships.

The most important ongoing habit you can begin is to pay all of your bills on time because your payment history accounts for the largest portion of your credit score. Even a single 30-day late payment can cause a significant dip, so imagine how bad it could be if you regularly miss a payment.

Your other best bet for rebuilding your credit after bankruptcy is to avoid accruing new debt.

Depending on the type of bankruptcy filing, you probably had much of your debt discharged. So even though the bankruptcy itself is a major negative item on your credit report, consider the rest a blank slate.

Avoid racking up additional debt because that also has a significant impact on your credit score.

You may also want to get a secured credit card. Its a credit card designed for people who want to rebuild their credit. The credit card issuer will give you a credit limit based on the security deposit you pay upfront. By making monthly payments on time, you can start to rebuild your credit immediately.

Working With Credit Repair Companies

The method outlined above is one path for how to remove bankruptcies from credit reports. However, it can be very complicated and time-consuming. Depending on your situation, contacting the top credit repair companies may be better than attempting to solve the problem on your own.

A credit repair company is a professional organization. They can help remove incorrect or inaccurate items from your record and advise on improving your score.

One of the specialties of these organizations is getting bankruptcies dropped from credit reports. As with any field, it is crucial to contact a trusted company. As bankruptcy cases are public records, some companies may contact you on their own. Make sure to avoid scammers who promise perfect results at no cost. It is common for the vulnerable to find themselves targeted in this way.

Professionals can make the process easier and are knowledgeable about the dispute process. That said, they cannot guarantee results. There need to be legitimate grounds in the form of an error to drop a bankruptcy from a credit report. Therefore, its crucial to make sure you are willing for a credit company to take your case and to check the terms of their services.

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