You’ve declared bankruptcy, now what? If you’ve been through a bankruptcy, you probably can’t wait until it’s removed from your credit reports. You might also be wondering how long it takes, if it’s automatically removed and if there is any way to speed up the removal process.
A Little Background
When you file for bankruptcy, it is known as “public record” information. Information about bankruptcy filings are maintained by the court where the case was filed. Credit reporting agencies get information about these filings from the courts, and verify them with the courts when there is a dispute. You can always check that information yourself using the Public Access to Court Electronic Records system.
How Long It Takes
This varies depending on the type of bankruptcy that’s been filed. Under the federal Fair Credit Reporting Act, bankruptcies can be reported for 10 years from the filing date – not the discharge date. However, all three major credit reporting agencies will remove Chapter 13 bankruptcies seven years from the date the case was filed. Chapter 13 cases are when the debtor pays some or all of their debt back over time.
On the other hand, a Chapter 7 bankruptcy remains on your credit report for 10 years. Chapter 7 bankruptcy are cases that don’t have a plan of repayment filed, namely, the debtor has property and nonexempt items sold to cover the debt. Chapter 7 bankruptcy wipes out almost all unsecured, nonpriority debts, including credit card debt.
The filing itself is not the only information about your bankruptcy that appears on your credit reports. “One is the public record, the court filing; the other are the individual accounts (included in the bankruptcy),” says Rod Griffin, director of public education for the credit reporting bureau Experian.
Each account included in the filing will list a notation, “included in bankruptcy.” Those accounts will be deleted seven years from the date the account originally went delinquent and was never brought current, leading up to when it was included in the filing. “In most cases, the accounts will be deleted before the bankruptcy is removed,” Griffin says.
As for the bankruptcy itself, our reader doesn’t have to do anything specific to get it removed after the seven or 10 year reporting period is up. “It’s automatic,” says Griffin. “We track the filing date and we will delete the public record automatically.” Keep an eye on your credit report to ensure it’s removed when it ought to be. No system is flawless.
Speeding up the Process
Removing a bankruptcy requires filing a separate dispute with each of the three credit bureaus. This dispute can either be over inaccurate information in your credit report or an inquiry to the credit bureau about how your bankruptcy was verified. When they do respond about how it was verified, the process is an ongoing one. If it was verified in the courts you must also look into that. This process is lengthy but it can potentially be worth it.
Bankruptcy information is easy to verify with the courts. As long as it’s part of the public record, it can be reported. Because of that it can be difficult to get credit reporting agencies to delete bankruptcies from credit reports.
While You Wait
Don’t let one financial mistake set you back for the years to come. It’s a myth that you can’t get credit after bankruptcy. While you’re waiting for the bankruptcy to be removed, actively make efforts to rebuild and improve your credit. Ensure you have current positive credit references listed on your credit reports. Remember, once that filing is removed from your credit reports, your credit scores can drop again if you haven’t made an effort to rebuild credit.
This article has been updated. This article was originally published April 18, 2013.