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NEW Tactics for Removing Bankruptcies from Credit Reports in 2023!

By: Daniel Rosen Last updated: February 28, 2023

There are new Expert Level Tactics for removing Bankruptcies from Credit Reports, and today, I'm gonna teach you how to get it done!

Bankruptcy is the single most damaging item that can appear on a Credit Report. They make it nearly impossible to get approved for loans. They can prevent you from getting jobs, and depending on the type of Bankruptcy, they can stay on your Credit Report for 7 to 10 years!

But worst of all, most Bankruptcies aren't caused by bad financial habits. No. They're the result of one unexpected major life event. 

And considering 63% of Americans live paycheck to paycheck, it's not hard to guess why these Bankruptcies happen. 

In 2005, when Personal Bankruptcies spiked to over 2 MILLION cases, 46% listed medical-related expenses as the reason for filing. Other reasons included job loss, reduced income, and divorce. 

A Bankruptcy is an extremely stressful situation, and it's true your finances will need to be rebuilt from scratch, but it can be done! And the first step to making a full recovery is removing the Bankruptcy from your Credit Report! 

HOW THIS RELATES TO US

For anyone new to Credit Repair, Bankruptcy is a legal process that allows individuals or businesses to eliminate, restructure, and repay their debts under the protection of a court. There are two main types of Personal Bankruptcy: Chapter 7 and Chapter 13.

CHAPTER 7 is considered a "liquidation bankruptcy," which involves selling all your non-exempt assets to repay your creditors. They stay on Credit Reports up to 10 years after the filing date.

 

CHAPTER 13 is a "reorganization bankruptcy," which involves creating a repayment plan to settle debts over a three to five-year period. They stay on Credit Reports up to 7 years after the filing date.

According to FICO Scoring Models, the impact of a Personal Bankruptcy depends on what your Credit was like before you filed. And the higher your Credit Score was, the further it will fall, with some high scores dropping over 200 points!

Now, Personal Bankruptcies have steadily declined since 2005, but experts are now predicting that an increase is coming as a result of the Pandemic. 

Court closures, PPP Loans, and other Pandemic related Relief policies slowed bankruptcy filings, but we should expect to see a lot more soon.

THE THING TO REMEMBER

Bankruptcies are filed with the courts, not the Credit Bureaus. They are Public Records. Public Records are different from most negative items that appear on Credit Reports because they are about court-related matters.

The courts don't actually send these Public Records to the Credit Bureaus. The Credit Bureaus buy the records from companies like LexisNexis, which collects the information from public record databases like PACER. 

If this sounds like a strange system, you're right! It is! But you can actually use this strange system against itself to remove items from Credit Reports!

WHY THIS IS IMPORTANT

When the Credit Bureaus receive Public Records from LexisNexis, they often list the Furnisher of information as the "Recorder of Deeds," the "Clerk of Courts," the "Magistrate," or the "Municipal Court." 

They do not list the actual Furnisher! 

This amounts to false reporting, which directly violates the Fair Credit Reporting Act and provides a perfect reason to Dispute the Bankruptcy.

WHAT YOU NEED TO KNOW

As always, you start the Credit Repair process by Disputing any incorrect information that appears on the Credit Report. Beyond that, there's one Expert Level Tactic for Removing Bankruptcies from Credit Reports, and I'm going to break it down into 6 Easy Steps.

HERE'S HOW IT WORKS

STEP 1: Sign up for a PACER account. 

PACER is a public records database that anyone can access for free, and companies like LexisNexis use it to gather our data. 

STEP 2: Contact LexisNexis and request a Consumer Disclosure Report

Thanks to the FCRA, they're required to provide you with a copy for free.

STEP 3: When you have the PACER account records and the LexisNexis Consumer Disclosure Report, compare the information in both. 

Look for inconsistencies and Dispute them with LexisNexis just like you would with a Credit Bureau. They follow the very same rules.

If you're able to remove the Bankruptcy from the LexisNexis Report, your odds of removing it with the Credit Bureaus increase dramatically!

STEP 4: Dispute the Bankruptcy with the Credit Bureaus. 

Do this just as you would any other item. If the Bureau verifies the information, move on to the next step! 

STEP 5: Send a simple letter addressed to the Clerk of the Court where you filed the Bankruptcy. 

There is no need to get into details or specifics. Just say something like: 

"I have a record from your court appearing on my credit report. I've disputed the item with the Credit Bureaus Equifax, Experian, and TransUnion - all of which confirmed the record was verified by you. Please provide the procedure in which you verify records with the credit bureaus." 

Send this letter to the Clerk of the Court with a self-addressed, stamped envelope and your return address to make it easy for them to respond.

The Clerk of the Court will usually respond with a letter explaining (what you already know) they DO NOT report to the Credit Bureaus. 

Now you're cooking with gas!

STEP 6: Make a copy of the letter you received from the Clerk of the Court and send it to the Credit Bureaus along with a demand for deletion. 

It doesn't have to be written the exact same way, but it should be something like this:

"I have previously disputed (INSERT Public Record Name / Reference #) with you, 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 any credit bureau for that matter; therefore, your initial 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." 

The Bureaus know the law and understand they have a potential violation if they don't remove it. So they will typically respond with a deletion. 

If the Bankruptcy is deleted, you'll soon be able to qualify for loans and lines of credit without dealing with the predatory, high-interest rates that keep people with bad credit stuck in the never-ending cycle of debt.

If the Bureaus refuse to delete the Bankruptcy, despite your valid reason for removal, it's time to file a complaint with the CFPB because you are entitled to fair and accurate reporting. 

If you'd like copies of these Public Record Dispute Letters, you can download them FREE at CreditRepairCloud.com/Public-Record-Dispute

MY FINAL POINT

Bankruptcy is the single most damaging item that can appear on a Credit Report, but that also means removing them has the greatest positive impact on someone's life. 

Disputing a Bankruptcy may not be the fastest process, but success is a major step to financial recovery. So it's always worth the effort.

I'll end by saying…

If you don't already have a Credit Repair Cloud account, check it out. It's the software that most Credit Repair businesses in America run on. Just sign up for a 30-Day Free Trial at CreditRepairCloud.com/freetrial

And if you'd like to change lives and grow your own credit repair business, check out our Credit Hero Challenge!

Challenge-Stack-Mockup-Final

It's an amazing program, and we've got another challenge starting in a few days, so grab your spot right now at CreditHeroChallenge.com!

So take care, Credit Hero!

Keep Changing Lives!

Be sure to subscribe on your favorite platform below!

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Topics: Podcast

Transcript

Hey, Credit Heroes. There are new expert-level tactics for removing bankruptcies from credit reports, and today I'm gonna teach you how to get it done so you better stick around.

 

So the big question is this, how can we take our passion for helping people with their credit and turn it into a successful business without taking loans, without spending a fortune by bootstrapping it from nothing so we can help the most people and still become highly profitable? That is the question, and this podcast will give you the answer. My name is Daniel Rosen, and welcome to Credit Repair Business Secrets.

 

Okay, if this is your first time listening to my podcast every week, I give credit repair tips and advice on bootstrapping your business from nothing. So be sure to click subscribe now and get ready to start changing lives. Okay, let's get into this. Bankruptcies are the single most damaging item that can appear on a credit report. They make it nearly impossible to get approved for loans. They can prevent you from getting jobs, and depending on the type of bankruptcy it is, they can stay on your credit report for seven to 10 years. But worst of all, most bankruptcies aren't even caused by bad financial habits. No, they're the result of one unexpected major life event. And considering 63% of Americans live paycheck to paycheck, it's not hard to guess why these bankruptcies happen. In 2005, when personal bankruptcies spike to over 2 million cases, 46% listed medical-related expenses as the reason for filing.

 

Other reasons included job loss, reduced income, and divorce. Bankruptcy is a very stressful situation, and it's true that your finances will need to be rebuilt from scratch, but it can be done. And the first step to making a full recovery is removing the bankruptcy from your credit report. So how does this relate to us? Well, for anyone new to credit repair bankruptcy is a legal process that allows individuals or businesses to eliminate, restructure, and repay their debts under the protection of a court. There are two main types of personal bankruptcy, chapter seven and chapter 13. Chapter seven is considered a liquidation bankruptcy, which involves selling all of your non-exempt assets to repay your creditors. They stay on your credit report for up to 10 years after the filing date. Chapter 13 is a reorganization bankruptcy, which involves creating a repayment plan to settle debts over a three to five-year period, and they can stay on credit reports for up to seven years after the filing date.

 

According to FCO scoring models, the impact of a personal bankruptcy all depends on what your credit was like before you filed, and the higher your credit score was, the further it will fall with some high scores dropping over 200 points. Now, personal bankruptcies have steadily declined since 2005, but experts are now predicting that an increase is coming as a result of the pandemic court closures. P P P loans and other pandemic-related relief policies slowed the bankruptcy filings, but we should expect to see a lot more soon. Here's the thing to remember. Bankruptcies are filed with the courts, not with the credit bureaus. They are public records. Public records are different than most negative items that appear on credit reports because they are about court-related matters. The courts don't actually send public records to the credit bureaus. No, the credit bureaus buy the records from companies like Lexus Nexus, which collects the information from public record databases like pacer.

 

If this sounds like a strange system, you're right, it is. But you can actually use this strange system against itself to remove bankruptcies from credit reports. Here's why this is important. When the credit bureaus receive public records from Lexus Nexus, they often list the furniture of information as the recorder of deeds, the clerk of the courts, the magistrate, or the municipal court. They do not list the actual furniture. And this amounts to false reporting, which directly violates the Fair Credit Reporting Act and provides a perfect reason to dispute that bankruptcy. Here's what you need to know. As always, you start the credit repair process by disputing any incorrect information that appears on the credit report. Beyond that, there's one expert-level tactic for removing bankruptcies from credit reports. And I'm gonna break it down into six easy steps. Step number one, sign up for a pacer account.

 

Pacer is a public records database that anyone can access for free and companies like Lexus Nexus use it to gather our data. I added the pacer signup link over there to the show notes. Step two, contact Lexus Nexus and request a consumer disclosure report. Thanks to the Fair Credit Reporting Act, they're required to provide you with a copy for free, and I added the direct link to the report request site over there in the show notes. Step three, when you have the pacer account records and the Lexus Nexus Consumer disclosure Report, compare the information in both. Look for any inconsistencies and dispute them with Lexus Nexus just like you would with a credit bureau. They follow the very same rules. If you're able to remove the bankruptcy from the Lexus Nexus report, then your odds of removing it from the credit bureaus will increase dramatically.

 

Step four, dispute the bankruptcy with the credit bureaus and do this just as you would with any other item. If the bureau verifies the information, move on to the next step. Step five, send a simple letter addressed to the clerk of the court where you filed the bankruptcy. There's no need to get into details or specifics. Just say something simple like this. I have a record from your court appearing on my credit report. I've disputed the item with the credit bureaus, Equifax, Experian, and TransUnion, all of which confirmed that the record was verified by you. Please provide the procedure in which you verify records with the credit bureaus and send this letter to the clerk of the court with a self-addressed stamp envelope and your return address to make it very easy for them to respond. The clerk of the court will usually respond with a letter explaining what you already know.

 

They do not report to the credit bureaus, and now you're cooking with gas. Step six, make a copy of the letter you receive from the clerk of the court and send it to the credit bureaus along with a demand for deletion. It doesn't have to be written this exact same way, but it should be something along the lines of this I have previously disputed. And then insert the public record name and the reference number with you. And in response, you verify 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 any credit bureau for that matter. Therefore, your initial response verifying the item with the court was either an error or a lie. Either way, the reporting requirements do not comply with ffc R a 6 11 15 USC 1 16 8 1 I, and the information must be deleted immediately.

 

The credit bureaus know the law and they understand that they have a potential violation if they don't remove it. So they'll typically respond with a deletion. If the bankruptcy is deleted, you'll soon be able to qualify for loans and lines of credit without dealing with the predatory high-interest rates that keep people with bad credit stuck in the never-ending cycle of debt. If the credit bureaus refuse to delete the bankruptcy despite your valid reason for removal, then it's time to file a complaint with the CF p b because you're entitled to fair and accurate reporting. And if you'd like copies of these public record dispute letters, you can download them free right now at creditrepaircloud.com/public-record-dispute. And here's my final point. Bankruptcy is the single most damaging item that can appear on a credit report, but that also means that removing them has the greatest positive impact on a person's life. Disputing bankruptcy may not be the fastest process, but success is a major step to financial recovery, so it's always worth the effort. And just a reminder, this podcast is brought to you by Credit Hero Score. Credit Hero Score is the

 

Only credit monitoring service that integrates directly with Credit Repair Cloud. Get instant access to your credit reports and scores by signing up for a seven-day trial for only $1. Sign up right now at creditheroesscore.com.

 

And now for my favorite part of the episode, every week I feature one of our credit heroes inside our credit Repair cloud Facebook community so that you can see firsthand what real people are doing as they run and grow their businesses. And today's spotlight is on Tiffany Watts. Tiffany posted that she was able to boost her client's credit scores by an average of 30 points in just 30 days, and she did it using the round one dispute letters. The client thanked her with a glowing five-star review saying she did a great job and fought for her client like a lawyer. Well done Tiffany. Results like that prove that you are mastering your craft. And five-star reviews are a great reminder that you are changing lives. And I'll end by saying, if you haven't seen Credit Repair Cloud 2.0, check it out. It's the software that most credit repair businesses in America run on.

 

Just sign up for a 30-day free trial at creditrepaircloud.com/freetrial. And if you'd like to change lives and grow your very own credit repair business, check out our Credit Hero Challenge. It's a live experience that has helped tons of people to get certified in disputing and gain confidence as they run their credit repair business on a solid foundation so they can change a whole lot of lives and make a great living in the process. We're starting the next challenge very soon. So you wanna join before the door is closed, or are you gonna have a long wait until the next one? So sign up right now at creditherochallenge.com. And if you're finding value in the things that I share on this podcast, click below to subscribe and follow. Also, gimme a five-star review, gimme a thumbs up, or share the show and help me to change more lives. If you have a question or a comment, drop it down below because I read each and every one of them. I would love to hear from you and I'll respond as soon as I can. If you wanna learn some easy tricks to boost credit scores, check out my episode on how to delete negative items instantly. So take care, credit Hero, and keep changing lives.

 

Hey everybody, it's Daniel again, and really quick, I'd like to invite you to join what I believe is the best thing we have ever created inside the Credit Repair Cloud community. And it is a challenge that we call the Credit Hero Challenge. If you're just planning out your business or you're just getting it started and you dream of having a successful business of your own so you can quit your nine-to-five and fire your boss and have financial freedom or so, you can add another revenue stream to your existing business. If that's your dream, you need to get into this challenge. We created this challenge to help you to create and launch your very own credit repair business to build a proper foundation for a really successful business. This challenge is going to help you to understand the strategy, the tactics, and all the things you need to be successful at credit repair. It really is the greatest thing we have ever built, and it will change your life. So I recommend you do it right now. Stop everything, pause this audio, go online, and go to creditherochallenge.com. That's creditherochallenge.com and join the next challenge. And there's a challenge that's starting in just a few days. So go get started right now at creditherochallenge.com.



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