Depending on the type of bankruptcy you have, after 7-10 years, it will officially fall off your credit report.
But what if you or your client wants to remove it early?
Removing a bankruptcy early can be life-changing because it opens up all the possibilities to things like qualifying for a mortgage and a car loan. Plus, if the bankruptcy is wiped out from your record, you can qualify for lines of credit without the predatory, high-interest rates that keep people with a bad credit history stuck in a downward spiral of debt.
One mistake does not have to affect your life for the next ten years.
Removing bankruptcy can be a long and tedious process, but it is definitely worth trying because getting one removed is AWESOME!
So here’s what you need to know:
- Bankruptcies are filed with the courts, NOT with the credit bureaus
- And the courts don’t even report to the credit bureaus
- But they still show up on your credit report!
That’s because the credit bureaus BUY this information. They purchase this information about bankruptcies from companies like LexisNexis, who pull the information from PACER.
This is the key to removing it, and here’s the reason why:
It's essentially a technicality but it does work. You see, the credit bureaus often report the furnisher of information as the “Recorder of Deeds”, the “Clerk of Courts” or the “Magistrate” or sometimes it will be reported as the “Municipal Court”. All of which are NOT the furnisher.
This is considered false reporting, which is a violation of the Fair Credit Reporting Act, and a GREAT reason to remove a bankruptcy or any public record.
So how can YOU use that technicality to remove public records from reports?
Here’s how you do it:
- First, you’ll need a PACER account, which you can get at Pacer.uscourts.gov
- Next, you’ll need to pull the LexisNexis report for the client you're working on, then compare the information you find on PACER with what you find on LexisNexis report.
Everyone is entitled to one free copy of their LexisNexis report each year, thanks to the Fair Credit Reporting Act. And LexisNexis customer reps say that consumers do not need to pay for additional copies of their own reports, either.
Requesting a LexisNexis report online is the easiest way to get it. Get it at consumer.risk.lexisnexis.com/request
- Next, dispute any inconsistencies with LexisNexis just like you would with a credit bureau. They have to follow the same rules.
If you can remove the bankruptcy from the LexisNexis file, your chances of removing it with the bureaus increases dramatically.
Now, keep in mind that it often works without the LexisNexis step, but your chances are way better if you’re successful at the lexis nexis dispute.
I also always recommend removing any previous addresses or incorrect names from the bureaus before you proceed.
That’s because, in the next steps, the bureaus are going to match your client’s social, name, and address with the bankruptcy record. So removing any personal information that is connected with the record further improves your chances of deletion.
Now that you’ve worked to remove the bankruptcy from LexisNexis and you’ve cleaned up any personal information with the bureaus –
- The next step is to simply dispute the record with the credit bureaus. Do this just as you would dispute any other item.
- Then, when and if the bureau verifies the information, you need to send a new simple letter addressed to the clerk of the court where the record was filed.
Again, it needs to be sent to the clerk of the court of whatever court the actual bankruptcy record was filed, and not the bureau this time.
There is no need to get into specifics, just simply send the clerk what I'm about to show you, and be sure to include a prepaid self-addressed envelope and YOUR return address to make it super easy for them to respond back to you:
This is what you should say:
“I have a 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 the record was verified by you. Please provide the procedure in which you verify records with the credit bureaus.”
- Now that you sent your letter to the clerk of court, expect a response from the Clerk of Court.
The letter they send you will explain they DO NOT report to the credit bureaus. This is your golden ticket to removing the public record.
- When you get it, send a copy of the response you received from the Clerk of Court to the credit bureaus along with a letter.
It doesn't have to be exact, but should be something along these lines:
“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 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.”
And that's it!
The bureaus will typically respond back with a deletion. They know the rules and generally see that you have a potential violation if they dont remove it.
If they refuse to remove it, it is a good time to file a complaint with the CFPB because you have a valid reason for removal and are entitled to fair and accurate reporting.
And one more thing! Now that you have this new trick up your sleeve, you’re one step closer to launching or growing your business! SO, if you want to get certified in disputing and launch your very own credit repair business in just a couple of weeks, I invite you to join our Credit Hero Challenge!
It’s an amazing program that has helped tons of Credit Heroes get their first clients, get certified in disputing, and gain confidence in knowing they are launching their credit repair business on a solid foundation that allows them to grow and scale FAST!
We’re starting again soon, so SIGN UP NOW at creditherochallenge.com!
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