According to the American Bankruptcy Institute, in an article published in May of this year, over 760,000 bankruptcies were filed in the US by the end of March 2020… and that was BEFORE the effects of the pandemic!
Needless to say - as a Credit Hero - you’ve got to know how to dispute a bankruptcy and get it removed from your client’s credit report because without your help, it will leave an open wound on their credit for 7-10 years!
That bankruptcy means too often your client’s are getting an automatic “NO!” from lenders, employers, or even landlords for years!
As Credit Heroes we’re faced with doing our best to educate our clients, to help them to remove negative information and assist them in rebuilding their lives. So if you haven't already faced the task of removing a public record like a bankruptcy, you definitely will soon enough as the effects of this pandemic ramp up.
Here’s why this is important.
- Public records are different from most negative items on a credit report because they are specifically about court related matters such as civil judgments, tax liens, foreclosures and bankruptcies.
That’s exactly what they are, PUBLIC RECORDS - which means they’re available for the public to see. So where do the credit bureaus get this information from?
The credit bureaus purchase information about public records from companies like PACER and LexisNexis.
- So if no one reported the public record to your credit report, why do they go out and gather these records on their own, and why is that ok?
In my opinion, it’s not ok, and this is your chance to even the playing field.
- There’s a problem with this type of reporting because the credit bureaus report the furnisher of information as the “Recorder of Deeds”, or “Clerk of Courts” or “Magistrate” or “Municipal Court”, which is NOT truly the actual furnisher. So, this is a case of false reporting, which is in direct violation of the Fair Credit Reporting Act and a perfect reason to remove any public record.
So here’s what you need to know to dispute a bankruptcy in 3 easy steps:
- Dispute the public record with the credit bureaus using our dispute wizard or our letter finder feature in your Credit Repair Cloud account. If you don’t have a CRC account, you can get a free 30-day trial at signup.creditrepaircloud.com
- If the credit bureaus verify the information, send a simple letter addressed to the clerk of the court where the public record was filed. There’s no need to get into specifics, just send something simple along these lines, with a prepaid self addressed stamped envelope with your return address to make it super easy for them to respond back to you… here’s what you might write:
“I have a public record from your court appearing on my credit report. I’ve disputed the item with the credit bureaus Experian, Equifax and TransUnion - all of which confirmed that the public record was verified by you. Please provide the procedure in which you verify records with the credit bureaus.”
- Next, expect to get a response back from the Clerk of Court explaining they DO NOT report to the credit bureaus. Then, when you receive that , you send a copy of that response from the Clerk of Court to the credit bureaus along with a letter stating the following:
“I have previously disputed this item with you > Insert Public Record Name / Reference # < and in response you verified the item as accurate, stating that you have verified the information with the court. I contacted the court and their response is enclosed. It is clear they do not report to you or to any credit bureau for that matter; therefore your original response verifying the item with the court was either an error or a lie. Either way, the reporting requirements do not comply with FCRA § 611 (15 U.S.C. § 1681I) and the information must be deleted immediately.”
BOOM! You got ‘em! The bureaus will typically respond back with a deletion. If not, it is a good time to file a complaint with the CFPB because you have a valid reason for removal and you are entitled to fair and accurate reporting.
You can also compare the item within PACER and if you see any inaccuracies between PACER and LexisNexis you can dispute directly with LexisNexis to improve your chances at removal.
Whatever you do, don’t give up! Keep mastering your craft, keep expanding your knowledge and keep fighting for your clients! And if you’re watching this on YouTube and have additional questions - just leave them in the comments and I’ll do my best to help!
Remember… you really are a credit hero during this time of crisis.
Recently I had a chance to interview my good friend and mentor, Alex Charfen on my Credit Repair Business Secrets podcast . If you haven’t heard the interview, be sure to listen right after this one.
During the interview he made incredible predictions about what to expect in the near future for all credit repair businesses. Not only were they exciting - and even a little intimidating - but I believe, they were accurate!
There has NEVER been a better time in history to own and operate a home based business and NEVER a better time for that business to revolve around helping people during a financial crisis!
So if you’re on the fence about starting your credit repair business… I wanna encourage you to join our upcoming Credit Hero Challenge that’s starting really soon!
Over a couple weeks, we’ll hold you by the hand and take you step by step as you launch your credit repair business! It’s a highly interactive program with LIVE coaching calls, daily mentorship, and a ton of action steps and supportive bonuses… you even get certified in three different areas!So go check it out right now at creditherochallenge.com!
Be sure to subscribe on your favorite platform below!