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When Will My Bankruptcy Stop Staining My Credit Reports?

Comments 24 Comments

A reader’s bankruptcy is due to come off her credit reports, and she wants to know if she has to do anything to “scrub it off” herself.

Q: I filed Chapter 7 bankruptcy on March 1, 2002. Will the credit agencies automatically remove it from my credit history? If so, when? If not, what do I need to do to get them to remove it? – Maria

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A: Under the federal Fair Credit Reporting Act, bankruptcies may be reported for no more than ten years from the date of filing. That means your bankruptcy should no longer appear on your credit reports after March 2012. (If you had filed Chapter 13, where you pay back some of your debts over time, your bankruptcy would no longer be reported after March 2009 – seven years after you filed. That’s because the credit reporting agencies voluntarily stop reporting Chapter 13 bankruptcies – in which debtors pay back some or all of their debts over several years – seven years from the date of filing.)

This “scrubbing” process should happen automatically, and since the ten-year mark is less than a month away, it may already be gone from your reports. It would be a good idea for you to get free copies of your credit reports at AnnualCreditReport.com in late March 2012 to make sure your bankruptcy is gone. Go ahead and order copies from all three major credit reporting agencies; Equifax, Experian and TransUnion. They don’t share information with each other, so you’ll want to make sure each one has stopped reporting that information.

[Related Article: Reader Question: Improving Credit and Refinancing a Mortgage After Bankruptcy]

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And while it’s great that you are finally putting this behind you, keep in mind that you need positive credit references to earn a strong credit score. So if you have been avoiding credit, you may want to consider getting a credit card to establish a positive payment record. Keep your balances low and pay your bills on time, and you’ll truly be off to a clean start.

Image: D Sharon Pruitt, via Flickr

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  • William McVicker

    Gerri; A comment on the bankruptcy reporting of 10 yrs. I am into my 7th year of Chapter 7 filing ill-advised that the removal I was told about related to Chapter 13. And too, since then once again considering my second due to credit card debt, personal loan equaling approx. 42K. I tried the SafeGuard Credit Repair Re-pay program but Soc. Sec. Disability of 1600.00 mo. and no more put me in the same boat just from stem not stern.
    How is it possible, if at all, to bring my head above water? I should think there are no answers only empathy. Sincerely, J.W.McVicker

    • Gerri Detweiler

      Mr. McVicker,

      I am sorry I don’t fully understand your situation, but as you already know that is a large amount of debt compared to your income. Usually if someone can’t complete a Debt Management Program (DMP) which is what it sounds like you have attempted, then it may be that you do have to file bankruptcy a second time.

      The only other alternative would be to settle the debts, but I don’t know if you’ll be able to pull together enough money to make a settlement offer that the creditor will accept. It sounds like you should meet with a bankruptcy attorney again.

  • Pete Ramirez

    My chapter 13 bankruptcy is over (discharged) and my mortgage company stopped reporting my payments to the credit bureaus. Is this legal? What can I do about it?

  • Pete

    We hired a lawyer in 2006 to file bankruptcy. Our attorney didn’t file for us until 2009 (chapter 13). The bankruptcy was dismissed because we never followed through with it(didn’t complete paper work or even appear in court). We came to terms with our creditors on our own, due to a lack of faith in our attorney. Can we have the bankruptcy removed from our report since we never completed the process?

    • http://www.Credit.com Gerri

      Pete – That’s the rub. Bankruptcy filings remain on credit reports for the applicable time period (seven years for Chapter 13 and ten years for Chapter 7) regardless of whether the bankruptcy was completed or not. So you get all the credit damage but none of the benefit.

  • George

    When I filled for my bankruptcy in July of 2005 the law was, Chapter 7 would show up for only 7 years. So would I be grandfathered in or is it the law changed & I still have 3 years, not 1 month. Any info would be apprecieated.

    • Gerri Detweiler

      George,

      I think you were given some incorrect information. Under the Fair Credit Reporting Act, all bankruptcies can remain on credit reports for 10 years from the date of filing. That has always been the case and has not changed. What has happened is that the industry voluntarily agreed to remove Chapter 13 cases from credit reports seven years after the date of filing.

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  • Erin

    Hi… Any guidance would be great…

    We filed in 2005, and were under the advisement that the bankruptcy would be removed after 7 years had passed. In pulling out credit, we see that one credit agency has removed the bankruptcy, but the other two have not. Researching the web, I now see that it can reflect in your credit for up to 10 years. My Q: is it common for one agency to remove it but not the others? And given this, can we contact the other two and ask them to remove it since the one agency has? I have not seen any info on a situation like this… Thank u.

    • Gerri Detweiler

      Hi Erin – Did you file Chapter 13 or Chapter 7? Chapter 13 remains on your reports for ten years from the date you file while Chapter 13 can be removed seven years after you file.

      If you filed Chapter 7 and one of the CRA’s removed it after 7 years then you got lucky. They may not have had the correct information in their records and so it was treated as a Chapter 13. The other CRAs aren’t going to care what the other one did so doubt that telling them that will help.

      If you filed Chapter 13, however, it should be coming off your reports with all three credit reporting agencies this year (depending on the month in which you filed.) If it doesn’t, you can definitely dispute it.

      • Erin

        Thanks for the quick response. We filed Ch 7… I figured the other agencies wouldn’t care – but thought I’d ask – ya never know. ;)

  • Terri

    I was also told the same..I filed Chapter 7 in the state of North Carolina in October 2004. Discharged date was January 2005, and as the others have stated I was thinking it would be off my credit report as well 7 years later. And this was from more than 1 source.

  • Steve Wisnzno

    Geri:

    I filed for chapter 7 bankruptcy in Dec of 2002, so it should come off in Dec of 2012? Correct? Howver there is a deliquency / charge-off that was reported after in Feb. of 2003. When should that come off?

    • Gerri Detweiler

      Yes, your Chapter 7 bankruptcy cannot be reported after December 2012. The charge-off and delinquency, however, may be removed 7 years after the date you were late or the account was charged off.

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  • Yadira C.

    I had filled for bankruptcy on 2005. I want to buy a new car will it affect me at all trying to buy.

    • Gerri Detweiler

      Yadira – Your bankruptcy is quite old at this point. I don’t see any reason why you can’t try to get a car loan. You should check your credit scores first before you talk with a lender to see where you stand and to make sure you aren’t steered into a more expensive loan than what you qualify for.

      I assume you are concerned about the effect that inquiries will have on your credit scores. That is discussed in more detail in this article: Reader: Inquiries Dropped My Score 104 Points. (Look at the 3rd bullet point.)

  • luigi

    Sept 2012 I went to the Bankruptcy court to get a copy of my BK discharge doc, at that time they update the record to 2012. Can I get the date rescind back to the discharge date which was 2008?
    Bankruptcy filed in year 2007 and was discharge year 2008

    • Gerri Detweiler

      If your bankruptcy was discharged in 2008 then that should be listed on your credit reports. It is important that the correct date is listed because that is the information the bureaus will use when determining whether the bankruptcy can be reported. I recommend you get your credit reports from all three agencies and, if any of them have the discharge date listed incorrectly, dispute it. I recommend you do so in writing. You’ll learn more in this article: A Step-By-Step Guide to Disputing Credit Report Mistakes.

  • Deanna

    I filed Chap 7 in 2004 which was discharged and next year will be the 10 yr mark in which the credit bureaus should cease reporting it. I was young & didn’t know how to manage debt but have since established great credit (775 fico) and don’t have a problem obtaining new credit. My question is… will the credit bureaus stop reporting the BK based on their independant review of the BK date or do they do so as a result of receiving instruction/ orrespondence from the BK court? In the event they don’t stop reporting my BK, I want to know who I should be following up with to get this done.

    Thank you.

    • Gerri Detweiler

      As long as they have the correct filing date (which should be listed on your credit reports) it should come off automatically. If it doesn’t let us know and we’ll advise but there usually isn’t a problem.

  • http://credit.com Jack Harris

    My Bankruptcy is due to be deleted in March of 2014. I was trying to get it removed by sending letters to the 3 FICO Credit Reporting Agencies. One replied back that the file had been deleted and one replied that the information was correct. And I haven’t heard from the 3rd one as yet. Is there any way to get the Bankruptcy removed now? As one deleted it and one hasn’t? Could I possibly challenge the reporting agency that said the information was correct?

    Thank You!

    • Gerri Detweiler

      Jack – Public record information is hard to get deleted, even when there is a legitimate dispute. That’s because it is easily confirmed as being part of the public record. I’d suggest you focus instead on making sure everything else on your credit reports is accurate and as strong as possible so when the bankruptcy does get removed, you are in the best place possible with regard to your scores.

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  • http://www.credit.com/ Credit.com Credit Experts

    Johnny — Filing for bankruptcy doesn’t remove the accounts from your credit report. It just updates them to show that the accounts were included in the bankruptcy.

  • Redeye Dog

    I have a friend who had a Ch 7 bankruptcy in 1985 which discharged a student loan by court order. She still has a copy of it and her story is perplexing because it seems that everything she says is true but she is being damaged by a poor credit rating.

    The bank and collectors came after her for the money later that year and records show that she did contact them to let them know that the student loan was discharged by providing a copy of the court order.

    That did not deter the bank and collectors and they pursued her by reporting the debt as “late” and “collections” on her credit files to all 3 credit reporting agencies. What is difficult to understand is how can the so-called “debt” continue being reported on her credit file when the bankruptcy took place in 1985?

    She has tried to dispute the entries but the credit agencies say, “verified belonging to her.” We have visited a few attorneys but that seems like a costly uncertainty since none of them will say one way or the other if the student loan was discharged or not, in their opinion. They just want her to retain them and the cost is way out of her capability.

    What does someone do?

    • http://consumerrecoverynetwork.com/ask-a-question/ Michael Bovee

      I would encourage you to file a complaint with the CFPB. They accept complaints over debt collection and credit reporting issues, and are keen on student loan issues too. The situation you outlined involves all 3.

      I would encourage you to first sketch out the chronology of events, dates, companies and people involved throughout. Then visit the complaint portal and work through the screenshots of information: http://www.consumerfinance.gov/complaint/

      It can take a few weeks to hear back.

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