How to Remove Discharged Debt From My Credit Report

Discharged debt, often from bankruptcy, can appear on your credit report. This article guides you in identifying and correcting reporting errors related to discharged debt. It clarifies what discharged debt is and outlines steps for disputing inaccuracies with credit reporting agencies, ensuring your credit report accurately reflects its legal status.

Understanding Discharged Debt on Your Credit Report

Discharged debt refers to obligations a court has legally eliminated, typically through bankruptcy. For individuals, this often occurs under Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy involves liquidating assets to pay creditors, with most remaining unsecured debts then discharged. Chapter 13 bankruptcy involves a court-approved repayment plan over three to five years, after which any remaining eligible unsecured debts are discharged.

A discharged debt does not automatically mean it is removed from your credit report. The discharge eliminates your legal obligation to pay, but the account history, including its status, will remain on your report. Creditors should update discharged accounts to reflect a zero balance and a status like “discharged in bankruptcy” or “included in bankruptcy.” However, the original payment history, including any late payments prior to the bankruptcy filing, will stay on your report for up to seven years.

Identifying Inaccuracies in Reporting

Reviewing your credit report for errors is key. You are entitled to a free copy of your credit report once every 12 months from Experian, Equifax, and TransUnion. Access these reports at AnnualCreditReport.com, the official website. Many credit bureaus also offer weekly access to your report through their own platforms.

Look for inaccuracies related to discharged debts. Common errors include discharged debt showing an outstanding balance instead of zero. Accounts should be marked “discharged in bankruptcy” or “included in bankruptcy”; any account still active or delinquent after discharge is inaccurate. Also, check for incorrect dates. Such errors can negatively affect your financial standing.

Steps to Correct Reporting Errors

If you identify inaccuracies, dispute these errors with the credit reporting agencies. You can initiate a dispute with Experian, Equifax, and TransUnion online, by mail, or by phone. Online filing is often fastest, though mail allows for clear documentation. Dispute the error with each bureau reporting incorrect information.

When filing a dispute, provide information to support your claim. This includes your personal identifying information, the account number, and a clear explanation of the inaccuracy. Include supporting documents such as bankruptcy discharge papers and court schedules proving the debt was discharged. Send copies of documents, not originals, and retain copies of all correspondence.

Upon receiving your dispute, the credit bureau is required to investigate the claim within 30 days. The investigation period can extend to 45 days if additional information is submitted or after a free annual credit report request. During this time, the credit bureau will contact the creditor to verify accuracy. If the investigation confirms an inaccuracy or cannot verify the information, the credit bureau must update or remove the incorrect entry.

After the investigation, the credit bureau must notify you of the results in writing within five business days. If the dispute results in a change, you will receive a free updated credit report. If the credit bureau does not correct the error and the error persists, you have further options. You can contact the original creditor directly to dispute the information. You can also file a complaint with the Consumer Financial Protection Bureau (CFPB), which investigates consumer complaints regarding credit reporting.

Duration of Discharged Debt on Your Credit Report

Even when accurately reported as discharged, a bankruptcy filing will remain on your credit report for a specific period. The duration depends on the type of bankruptcy filed. A Chapter 7 bankruptcy can stay on your credit reports for up to 10 years from the filing date.

For a Chapter 13 bankruptcy, the entry remains on your credit report for up to seven years from the filing date. These timeframes refer to the bankruptcy public record itself. Individual accounts included in the bankruptcy will remain on your report, marked as discharged, for the same duration as the bankruptcy or up to seven years from the original delinquency date. After these periods, the bankruptcy and associated accounts should automatically be removed from your credit report.