How to Remove a Bankruptcy From My Credit Report

Filing for bankruptcy can be one of the hardest decisions to make. It often feels like the last resort when debts become unmanageable.

Yes, bankruptcy does offer a chance to start over financially; it gives you a clean slate and frees you from crushing debt. But, it also comes with major consequences–its impact on your credit report is among the most challenging outcomes.

Understanding how bankruptcy affects your credit, how you can possibly remove it from your credit report, and learning ways to address the resulting financial situation can help you regain control.

How Does a Bankruptcy Filing Affect My Credit?

A bankruptcy filing can stay on your report for years, immediately knock off 100 or even 200 points from your credit score, and make it extremely difficult to qualify for loans, credit cards, or favorable interest rates (if credit is approved).

Yes, when you decide to file for bankruptcy to get a ‘second chance,’ you need to rebuild your credit and improve your debt management skills to make the most of this opportunity. It’s a tradeoff that reduces or erases your debt but also lowers your creditworthiness.

If you had a good credit score when you decided to file for bankruptcy due to sudden medical bills, divorce, or other unavoidable reasons, the damage to your credit score is likely to be higher. In such cases, your credit score can drop by 150 to 200 points.

Understanding Chapter 7 vs. Chapter 13 Bankruptcy

There are two primary types of personal bankruptcy, and the one you file depends on your financial circumstances:

Chapter 7 Bankruptcy

In Chapter 7 (often known as ‘liquidation bankruptcy’), nonessential assets are sold to pay creditors, and most debts are discharged.

It’s considered ideal for individuals who have little to no disposable income. Once completed, most or all debts are discharged.

The process is relatively quick; it can last about four to six months.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy (often known as ‘reorganization bankruptcy’ or ‘wage earners bankruptcy’) allows individuals to keep their assets while working out a repayment plan with creditors.

Payments are typically made over a period of three to five years; remaining debts may be discharged after the plan is completed.

While Chapter 13 tends to have a less severe impact on your credit score, both types of bankruptcy will appear on your credit report.

How Long Will My Credit Report Show Bankruptcy Filing?

The duration that a bankruptcy remains on your credit report depends on its type:

Chapter 7 Bankruptcy: It stays on your credit report for 10 years from the filing date.
Chapter 13 Bankruptcy: This type of bankruptcy filing stays on your credit report for seven years from the filing date.

While the bankruptcy itself will fall off from your credit report after the time frames given above, any individual accounts included in the bankruptcy will only impact your report for seven years from the date of the original delinquency.

How Do Credit Bureaus Get Information About My Bankruptcy?

Credit bureaus obtain bankruptcy details through the court’s electronic records system, Public Access to Court Electronic Records (PACER).

While courts don’t directly report to credit bureaus (or verify the information concerning bankruptcy cases), the information is available in the public domain. Anyone can access this information.

Bankruptcy courts have no control over what kind of information credit bureaus see on PACER, how they use this data, or the specifics that appear on your report.

Can You Dispute a Bankruptcy on Your Report?

You cannot dispute an accurate bankruptcy filing, but mistakes do happen. Under the Fair Credit Reporting Act (FCRA), you have the right to dispute inaccuracies on your credit report.

If the reporting agency cannot verify the information, it must remove the error. You can review your credit report or seek assistance from a credit repair company to promptly identify and address such issues.

Most Common Types of Credit Report Errors for Bankruptcy

Errors on credit reports related to bankruptcy are not uncommon especially because it stays for so long. Here are some typical mistakes to watch for:

Discharged debts still show a balance.
Individual accounts included in bankruptcy still appear after seven years.
Bankruptcy filings continue to appear beyond their expiration date.
Incorrect details such as names, dates, or addresses.
Identity theft resulted in an erroneous bankruptcy listing.

If you spot an error, gather supporting documentation and contact the credit reporting agencies via their online systems or in writing. Be persistent and maintain records of all communications until the issue is resolved.

How Much Does it Cost to Remove Bankruptcy From My Report?

Disputing credit report errors, including inaccuracies in a bankruptcy, is free, whether done online, by phone, or via letter. But, it can be a strenuous and time-consuming exercise. If you prefer professional assistance, credit repair companies can help remove inaccuracies and other negative items like late payments, charge-offs, repossessions, etc. for a reasonable fee. Credit repair costs vary widely; so research thoroughly before hiring a credit repair company to ensure they’re reputable and suited to your needs.

Can I Fix My Credit After Bankruptcy? How?

Bankruptcy is a serious negative mark that stays on your credit report for a period of seven to 10 years. But, it doesn’t have to permanently damage your credit score.

With time, effort, and strategic actions, you can improve your credit score and rebuild your financial profile.

Here are some actionable steps that can help improve your credit after having filed for bankruptcy:

Use a Secured Credit Card: These cards require a cash deposit and offer a low-risk way to rebuild credit while reporting (positive) payment activity to bureaus.
Consider Using a Credit Builder Loan: Such loans help you build new credit. Payment activity is reported to credit reporting agencies, and you receive the loan amount upon completion.
Become an Authorized User: If a trusted friend or family member adds you as an authorized user to their credit card, you can benefit from their positive credit activity.

Developing responsible financial habits, such as budgeting for the entire year, making timely payments, and exercising caution with credit usage, is equally important for long-term credit health.

Final Words

While bankruptcy significantly affects your credit report, it doesn’t necessarily define your financial future if you are prepared to make the best use of it as a ‘second chance.’

If you have reasons to believe that the bankruptcy filing appearing on your credit report is erroneous, AMERICA CREDIT CARE is here to help. Our affordable credit repair services are designed to dispute errors and provide expert advice on strategies to rebuild your credit.

The journey does require persistence and patience, but the rewards of a healthy credit profile are well worth the effort.

We have many years of experience in evaluating credit and guiding consumers to assert their legal rights. We do it every day! We guarantee honesty and dependability, virtues which most people seem to have forgotten.

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We have many years of experience in evaluating credit and guiding consumers to assert their legal rights. We do it every day! We guarantee honesty and dependability, virtues which most people seem to have forgotten.