How to Remove a Bankruptcy from Your Credit Report Early

Bankruptcy is a serious financial event that can have long-lasting consequences on an individual’s credit score and overall financial health. To begin rebuilding your credit and financial stability, you must take steps to remove bankruptcy from your credit report as soon as possible.

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In this article, we will discuss strategies for removing bankruptcy from your credit report early and offer tips for rebuilding your credit after bankruptcy.

How long does a chapter 7 bankruptcy stay on your credit report?

A Chapter 7 bankruptcy allows you to repay your creditors to settle your debts. However, you have to meet a means test to be able to file for this type of bankruptcy.

Once you do file, a Chapter 7 can stay on your credit report for up to ten years, assuming you don’t take any actions to have it removed sooner.

How long does a chapter 13 bankruptcy stay on your credit report?

You can file for a Chapter 13 bankruptcy to keep your possessions and property and instead go on a multi-year payment plan to your creditors. It takes up to seven years for a Chapter 13 to drop off your credit report.

How can you remove a bankruptcy from your credit report?

A bankruptcy can affect your credit score and prevent you from getting financing for at least a few years. To avoid these lasting impacts, try taking these steps to achieve an early removal.

Step 1: Check for Accuracy

Your first step is to order a copy of your free credit report from all three major credit bureaus. Then, check your bankruptcy entry for any mistakes or incomplete information. Bankruptcy is a public record, so it will be listed in the ‘Public Records’ section. The accounts included in the bankruptcy filing will be listed in the ‘Potentially Negative Items’ section.

In the event you find an inaccuracy, you can dispute it directly with the three credit bureaus. You can do this online or over the phone, but we recommend sending a letter via certified mail for the best results.

If you have an older bankruptcy, the credit bureaus may not be able to verify the information, in which case it must be removed from your credit report. If they can verify the details, you still have a few more steps you can take to get the bankruptcy removed.

Step 2: Follow up on the Verification

Next, if the dispute process doesn’t work, it’s time to follow up with the credit bureau again. However, this time, you’re going to send a procedural request letter.

What exactly is that?

It’s 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 here’s the catch.

Courts typically don’t verify bankruptcies for any type of credit agency. Here’s where the next step comes in.

Step 3: Confirm with the Courts

Now it’s time to go back to the court and check if the credit bureau did, in fact, go and verify your bankruptcy. It should probably be the same court with which you filed your original bankruptcy but double-check the correspondence from the credit bureau to see which one they supposedly contacted.

Often, the court won’t confirm that they actually verified your bankruptcy. You need to request this information in writing and then send a copy to the three credit reporting companies. Don’t forget to keep copies of all correspondence for yourself.

Since the court doesn’t have proof that there was any verification process, you can tell them that they have violated the Fair Credit Reporting Act (FCRA) and should remove the bankruptcy.

Tips for Rebuilding Credit after Bankruptcy

Develop a Plan

To avoid accumulating debt again after bankruptcy, you need to develop a plan to manage your personal finances. This can involve establishing a budget, setting aside money in a rainy day fund, and cutting unnecessary expenses. Keep in mind that taking on too much new debt after bankruptcy can hurt your credit and make it more difficult to improve your credit score.

Establishing New Credit Accounts

One of the first steps towards rebuilding credit after bankruptcy is to establish new credit accounts. This can be done through the use of a secured credit card, which is a credit card that is backed by a cash deposit. Alternatively, a credit-builder loan can be used to establish a positive payment history and improve credit scores.

Making Timely Payments on All Debts

It is essential to make timely payments on all debts, including any outstanding debts that may have been discharged in the bankruptcy process. This will help to rebuild credit by demonstrating a consistent and reliable payment history.

Seeking the Advice of a Financial Advisor or Credit Counselor

Rebuilding credit after bankruptcy can be a challenging process, and seeking the guidance of a financial advisor or credit counselor can be helpful. These professionals can provide guidance on budgeting and debt management, as well as suggest strategies for rebuilding credit and improving financial stability.

Professional Help from a Credit Repair Company

Any time you attempt to dispute a negative item on your credit report, whether it’s a bankruptcy or a credit card late payment, it’s bound to be a long, arduous journey.

To save yourself a major headache, consider hiring a professional credit repair company. They’ll not only review your bankruptcy entries, but everything else on your credit report as well, so you can benefit from a holistic strategy for repairing your credit.

Professional credit repair companies can help you dispute and potentially remove negative items from your credit reports such as late payments, collections, charge-offs, repossessions, foreclosures, judgments, tax liens, and more. They have years of experience dealing with credit reporting agencies.

Life After Bankruptcy

The good news is you won’t have to live with bad credit history forever. But, before you start applying for new credit cards, it’s important to correct the habits that lead to poor credit scores in the first place. You may eventually want to start applying for credit cards, perhaps a secure credit card, especially if you don’t have any positive tradelines list on your credit report.

However, this time, you need to make sure you are only using up to 30% of your credit limit and make sure you’re paying off your credit cards in full every month. Most banks or credit unions will approve you for a secured credit card a year or two after filing bankruptcy.

Just remember that filing bankruptcy is not the end of the world. Now is the time to learn from your mistakes and start a new chapter in your life.