Is It Even Possible To Get A Bankruptcy Removed From Your Credit Report
We want to be upfront and transparent: its very hard to get a bankruptcy removed from your credit report. If all information is accurate and complete, it is not possible to remove a bankruptcy from your credit report. But if the bankruptcy entry contains any inaccurate or incomplete information, it may be possible to have it removed.
How Long Will A Bankruptcy Stay On My Credit Report
How long does a bankruptcy stay on your credit report? Well, it depends on the type of bankruptcy filed, but between 7 and 10 years.
Ouch.
I probably dont have to spell out that this is bad news for your credit score.
The impact lessens over time, but the first few years following a bankruptcy can be rough.
Before you go down a rabbit hole googling things like Can Lexington Law remove bankruptcy?, let me clarify something:
You cant magically delete a legitimate bankruptcy from your credit report. .
The good news?
There are a few things you can do to minimize the blow and rescue your credit score.
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.
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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Whether its accounts that dont actually belong to you or outdated derogatory information thats still being reported, incorrect information could be bringing your score down unnecessarily.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.
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 then acts as 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 open a new credit card, make sure you pay your monthly bills on time and in full so you can start working your way toward better credit.
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What To Do If Your Bankruptcy Report Is Wrong
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.
Ways To Rebuild Credit After Bankruptcy
Regardless of the type of accounts you open, be sure to make every payment on time. With credit cards its also important to pay your balance in full monthly and keep a low debt-to-limit ratio on the accounts.
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Impact Of Identity Theft On Your Credit Report
Identity theft when someone steals your personal information and uses it to open new financial accounts can wreak havoc on your credit. These new accounts show up on your credit record and hurt your score, especially if theyre delinquent or if the identity thief applied for several in a short amount of time.
Cleaning up your credit after identity theft can take anywhere from several months to years. The longer it takes you to realize someone stole your identity, the more difficult it will be to undo the damage. This is why keeping a close eye on your report and learning how to protect yourself from identity theft will help you to keep your information safe.
How to remove negative items related to identity theft
If you believe youve been a victim of identity fraud, file a dispute with the Federal Trade Commission online at IdentityTheft.gov or by phone at 1-877-438-4338. You should also file a police report.
To prevent further damage to your credit history, these are the steps you should take:
- Notify the incident to Transunion, Experian and Equifax through phone or mail
- Place a security freeze and fraud alert on your credit report
- Request a copy of your credit report through AnnualCreditReport.com
- Look out for unauthorized transactions or new accounts that dont belong to you
- Contact creditors to close compromised accounts
- Consider subscribing to an identity theft protection or credit monitoring service
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.
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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.
Confirm Accounts Included In The Filing Are Updated
As mentioned earlier, debts discharged in bankruptcy should be updated to reflect a zero balance. This will automatically give your score a small boost because your credit utilization ratio will plummet.
So, you want to access a free copy of your credit report from AnnualCreditReport.com and confirm accounts that were included in the filing are being reported accurately. If not, file a formal dispute with the credit bureaus to have the accounts rectified.
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What Is A Bankruptcy
Bankruptcy is an official court order to dismiss or rearrange your debts when you cant keep up with them. It may eliminate debts or restructure them in a more affordable payment and structure.
Either way, bankruptcy has serious effects on your and should be taken seriously. Knowing how it affects your credit and how long it follows you is important before you decide.
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Look At Your Credit Report
Credit repair starts with regularly reviewing your credit report. Thanks to the Fair Credit Reporting Act the three major credit bureaus are required to provide free credit reporting on an annual basis. You can get a free copy of your credit report once a year if you request one. Equifax has started offering six copies per year starting in 2020 and running through 2026, but you must visit the Equifax website to get the additional copies.
You can request a free credit report from each of the national credit bureaus at annualcreditreport.com or you can call 1-877-322-8228 to get your free copy. The three major credit bureaus may report your credit information differently, so make sure to review each carefully for inconsistencies. Take a good look at your credit card accounts and medical collection accounts to compare the information noted on each report. If you find an account you donât recognize, you can dispute the account.
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How Long Does Bankruptcy Affect Your Credit Score
You can expect recovery to begin fairly quickly after discharge, though there is no hard and fast timeline. A lot will depend on how you move forward: You must be very diligent about paying your bills as agreed. This is the best way to recover as quickly as possible.
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If You Discharged Debts In Bankruptcy Here’s How They Should Be Listed On Your Credit Report
Updated By Cara O’Neill, Attorney
In short, yes. Not only will a bankruptcy filing remain on your credit report for seven to ten years, but you can expect information about the debts discharged in bankruptcy to continue to appear on your credit report, too. In this article, you’ll learn what shouldand should notshow up on your credit report after you receive a bankruptcy discharge, and what to do if your credit report contains incorrect information.
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Reach Out To The Courts
Now you will want to reach out to the court with the same question. How did they verify your bankruptcy?
If the court responds they never verified the bankruptcy which is the most common scenario ask to get the statement in writing.
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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.
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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.
What Is A Pay
A pay-for-delete letter is when you offer to settle a balance on a negative account in exchange for the debt being deleted from your credit report. The creditor or debt collector is not obligated to agree to your request, but it may be worth sending the request. If you’re sending the request to a collection agency, you’ll need to offer enough for it to be profitable for them to settle. There’s no way to know how much that is, though. If you’re close to the seven-year mark for the item to fall off your credit report, it may not be worth sending a pay-for-delete letter.
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How Does A Bankruptcy Affect My Credit Score
A bankruptcy is one of the financial situations that can have the most negative effect on your credit scores. A legitimate bankruptcy can decrease a credit score by anywhere from 130 to 240 points, depending on the original score range.
If you have an average score of 680, for example, your score will drop by between 120 and 150 points following a bankruptcy. But if your score is 780, it will drop by between 220 and 240 points.
Thus, the higher your original score, the farther it will drop after filing for Chapter 7 or Chapter 13 bankruptcy. If your score starts out in the “good” range, it could immediately drop to “poor” following a bankruptcy.
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Be A Cautious And Informed Borrower
While it is always the case that lenders generally opt to not do business with many people who have had bankruptcies in the past, many do give them the option to take out loans just a month or two after a bankruptcy has been filed. Dont be tempted. Instead, research debt agencies who are able to work with you without taking advantage of your current situation. When you find one, check their credit guidelines. Also, take into account what interest rate you can afford to pay.
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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.
Wait For Accounts To Drop Off
If you choose not to take steps to remove closed accounts, you’ll be happy to hear that these closed accounts won’t stay on your credit report forever. Depending on the age and status of the account, it may be nearing the credit-reporting time limit for when it will drop off your credit report for good. If that’s the case, all you might have to do is wait a few months for the account to fall off your credit report, and then for your credit report to update.
Most negative information can only be listed on your credit report for seven years from the first date of deliquency.
If the closed account includes negative information that’s older than seven years, you can use the credit report dispute process to remove the account from your credit report.
No law requires credit bureaus to remove a closed account that’s accurately reported and verifiable and doesn’t contain any old, negative information. Instead, the account will likely remain on your credit report for ten years or whatever time period the credit bureau has set for reporting closed accounts. Don’t worrythese types of accounts typically don’t hurt your credit score as long as they have a zero balance.
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