If you’ve been through a bankruptcy, you probably can’t wait until it’s removed from your credit reports. How long does it take? Is it automatic? And is there anything you can do to speed up the process? That’s what Jack, a Credit.com blog reader asked recently:
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?
Information about bankruptcy filings are maintained by the court in which the case was filed. It is known as “public record” information. 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 (PACER) system.
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Under the federal Fair Credit Reporting Act, bankruptcies can be reported for 10 years from the filing date (not the discharge date, which comes later). 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 those in which the debtor pays some or all of their debt back over time.
But 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, he goes on to explain. “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.”
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As for the fact that one of the agencies removed Jack’s bankruptcy after he disputed it? He got lucky.
Unlike an old collection account where the collection agency may no longer be in business or may not have the debt anymore and not bother to respond to a consumer dispute, this type of information is easy to verify with the courts. As long as it’s part of the public record, it can be reported. (Inaccurate information about a bankruptcy can be disputed, of course.) So it’s not surprising that he hasn’t had success getting the other two agencies to delete the bankruptcy from his credit reports.
[Related Article: The First Thing You Must Do Before Paying Off Debt]
In the meantime, Jack should make sure he has current positive credit references listed on his credit reports. It’s a myth that you can’t get credit after bankruptcy, and once that filing no longer appears on his credit reports, he could actually see his credit scores drop again if he hasn’t made an effort to rebuild credit in the meantime.