How to Get Bankruptcies Removed From a Credit Report
Uncover how bankruptcy appears on your credit report. Learn the proper steps to manage its presence and remove erroneous information.
A credit report details a consumer’s financial history, including bill payment, loan information, debt, and public records like bankruptcy filings. Creditors use these reports to assess creditworthiness for decisions on credit, loans, or employment.
Understanding Bankruptcy on Your Credit Report
A bankruptcy entry indicates a legal process where an individual or business cannot repay debts. This information originates from public records, as filings are court-ordered and reported by credit bureaus.
Bankruptcy entries include identifying information like the filing and discharge dates, and the type filed (Chapter 7 or Chapter 13). Accounts included are marked “included in bankruptcy” or “discharged in bankruptcy,” typically showing a zero balance after discharge.
Standard Reporting Periods
The duration bankruptcy information remains on a credit report depends on the type filed. A Chapter 7 bankruptcy remains for up to 10 years from the original filing date. This reflects the discharge of most unsecured debts without repayment.
A Chapter 13 bankruptcy, which involves a repayment plan, stays on a credit report for up to 7 years from the filing date. The reporting period for both types begins from the date the petition was filed. Accurate bankruptcy entries cannot be removed before these periods expire.
Disputing Inaccurate Bankruptcy Information
Consumers can dispute inaccurate information on their credit report. Inaccurate entries include incorrect filing or discharge dates, the wrong bankruptcy chapter, a bankruptcy listed when none was filed, accounts showing a balance after discharge, duplicate accounts, or misidentification errors.
To initiate a dispute, gather specific documentation. This includes official court documents like the petition and discharge order, which verify filing and discharge dates. Proof of identity, such as a government-issued ID and utility bills, is also needed. Collect any correspondence with creditors or the bankruptcy court that supports the claim of inaccuracy.
Submit disputes to the three major credit reporting agencies: Experian, Equifax, and TransUnion. Disputes can be filed online, by mail, or phone; certified mail with a return receipt is recommended for a clear record. The dispute letter should state personal identifying information, identify the inaccurate item, explain why it is incorrect, and include copies of all supporting documentation.
Upon receiving a dispute, credit bureaus are required by the Fair Credit Reporting Act (FCRA) to investigate within 30 to 45 days. The bureau contacts the data furnisher (e.g., bankruptcy court or a creditor) to verify the information. If the investigation confirms the information is inaccurate, the credit bureau must correct or remove the entry.
If the dispute is denied, consumers have further options. They can request an explanation from the credit bureau regarding the denial and any supporting documentation. Consumers can also file a complaint with the Consumer Financial Protection Bureau (CFPB) or the Federal Trade Commission (FTC). If the dispute remains unresolved or FCRA violations are suspected, consulting a consumer law attorney may be a suitable next step, as legal action might be an option.