Bankruptcy – Getting it Off Your Credit Report!
First, a bankruptcy can lower your credit score 100-290 points, but late payments, charge-offs and judgments ruin your credit score as well. Yet generally, you will come out with a higher credit score AFTER a bankruptcy because it drastically changes your debt to income ratio (assuming you are behind on payments). A chapter 7 bankruptcy comes off your credit reports within 10 years and a chapter 13 bankruptcy comes off your credit reports after 7 years from completion. Can you legally remove a bankruptcy from your credit report before thew 7-10 years ? Yes! The law states the upward limits of how long a bankruptcy can stay on your credit report – but they don’t have to be on your credit report that long – or at all.
You have to know the game in order to beat them!
Persistently pester. Demand documentation. Provide proof. Look litigious. Trick and trap. NEVER, EVER, LIE.
To be clear, never lie. NEVER say you didn’t file bankruptcy if you did. NEVER claim a debt is not yours if it is yours. In your disputes, thew law is on your side. You need not prove anything, just cast doubt, the burden of proof is theirs.
ALSO, there is no law saying ANYTHING, including bankruptcy, has to be listed on your credit reports. The law does set limits on how long things CAN be listed, and how they can be listed, and that they must be valid. “Validity” is where most credit report clean-up lies.
I quote the US Bankruptcy Court, District of Maryland: “No, the Court does not report bankruptcies to the credit bureaus and does not get involved in disputes regarding credit reports.” – US Bankruptcy Court District of Maryland FAQ, answer for question #5 – This means the court won’t validate your bankruptcy to the credit bureaus, and if the court won’t validate it, who can???
First, I am not a lawyer. This IS NOT legal advice. It is simply legal pondering that has proven to work. This is something unique to me and only me. While nothing in credit repair works every time, it is possible to have a bankruptcy removed from a credit report. This is HUGE.
Now some background information. Credit reports have information as reported by original creditors and collection agencies. Sometimes they collect information from public records . . .
Credit Bureaus are private companies that are profit-driven and under strict laws on their behavior. They may say they investigate claims, and they do, but generally their investigations (if they actually happen) are not complete. Remember they are profit-driven and there is no profit for them in investigating.
Credit bureaus report data from collection agencies and original creditors. WHO REPORTS BANKRUPTCIES???
The truth is you do – but you don’t have to report it to them. In a bankruptcy petition, there is what is called “Schedules”. This is supposed to be a list of all your creditors . . . but it is often more. Nearly ALL bankruptcy attorneys worth their salt add possible creditors and agencies that you don’t list. These are common creditors and agencies that a lot of people have and forget. It is done to protect you.
It is believed that there is no harm in notifying the potential creditors . . . and it could be a HUGE help. If you owe something that is not listed in your “Schedules”, and you are paying out money or losing property in the bankruptcy, if it is not listed, the creditors missing won’t get paid. The creditor doesn’t like being left off, and neither does the bankruptcy administer.
Bad things could happen by missing a creditor, including having to pay the creditor in full when you could have paid them in part. You may have to reopen your bankruptcy and talk to a judge. It is possible for your action to be viewed as fraud, which is jailable. Your attorney REALLY is looking out for your best interests.
Nearly ALL bankruptcy attorneys list the three national credit bureaus in the “Schedules” even though the credit bureaus are NOT creditors and are owed nothing and have no basis to sue you. Why do bankruptcy attorneys do this?? Well, if they don’t, you will have to clean up your report by yourself since many creditors will not report it the bureaus. What happens if your bankruptcy attorney doesn’t put the credit bureaus on your “Schedules”? You have to challenge tradeline thing yourself. The negative is it is more work, the positive is it is easier to have the tradeline removed.
How to Remove a Dismissed Bankruptcy From a Credit Report
- Get a copy of your dismissal from the court
- Write a letter explaining that the bankruptcy was dismissed.
- Include your social security number and current address
- Include any previous addresses they may have on file.
- Request that the change be made within 30 days.
- Include a copy of the documentation for the bankruptcy dismissal.
- Send it Certified mail, return reciept requested to each credit bureau that lists your dismissed bankruptcy.
- If they do not respond, or do not respond favorably, send it again, and at the top put “2nd Letter”.
Bankruptcy Removal Option “A”
The first thing you should do is go through my steps to remove as many tradelines as possible – especially tradelines that mention bankruptcy. During this time your bankruptcy records will be archived making them harder to access. By removing tradelines that mention bankruptcy you remove an excuse for the credit bureau to keep your bankruptcy.
When a credit bureau verifies a bankruptcy through its automated system, the system pulls only one of the “tradelines” to verify that the bankruptcy is legitimate. What if the “tradeline” the system pulls is missing? The system reports that the bankruptcy is not verifiable and it is removed from the credit report!
The strategy here is to remove as many of those “tradelines” as you can from your credit reports first, before you dispute the bankruptcy itself. The more tracks you can remove, the greater your odds of successfully removing the bankruptcy.
The next step is to have the credit bureau re-investigate your bankruptcy. The more times they re-investigate, the greater the odds that they will use one of the tracks you have deleted to verify the bankruptcy, and it will be deleted. It is important you send documentation with all of your disputes, otherwise, the credit bureaus may consider your dispute frivolous and not re-investigate.
Bankruptcy Removal Option “B”
What’s next? Your creditor is into making money. That is their job. There is no money in reporting a bankruptcy, so when you challenge the bureau and the bureau may ask the creditor, there is no money to respond. Now many will respond, and if they do not put down that the debt is zero due to bankruptcy, you have a valid reason to sue them. Now you have leverage for them to take it off your report! Being litigious without an open threat can do wonderful things, and they DID break the law, so you can get $1,000 off them, and if they misreported it to all three credit bureaus, that is $1,000 x 3!
Don’t get mad at your attorney for listing the three credit bureaus. They all do it for your own good, but they DON’T HAVE TO list them!
If they are not listed, how will the credit bureau know about the bankruptcy? EXACTLY! The courts DO NOT report a bankruptcy unless asked, ultimately by you since you signed the bankruptcy petition. Many courts will not answer a request for validation from the credit bureaus – the clerks are just too busy. Only you or the court can truely validate your bankruptcy with the credit bureaus – and if you don’t, and the courts don’t . . . a third party is not enough.
Now the credit bureaus also use a third party database such as PACER or LEXIS NEXIS or even verify through other creditors, but the court isn’t VALIDATING the bankruptcy. Can the court validate a bankruptcy? Yes, but it is not the practice – remember the court clerks are just too busy! Think of the increased work-load for the clerks! When it is not able to be validated, if challenged it should be dropped as according to The Fair Credit Reporting Act (15 U.S.C. § 1681) .
So the creditors must show the bankruptable debt as $0.00 after a bankruptcy, and the reason they show on the credit report is bankruptcy. The bankruptcy cannot be confirmed by the collection agency, so the collection agency (if challenged) removes the bankruptcy notation. That is the idea. Does it work? Yes, but nothing works all the time.
Bankruptcy Removal Option “C”
A third method is disputing facts such as filing date, the balance of liabilities, type of bankruptcy, social security number, discharge dates on debts, type of accounts and even docket dates are a lot harder to investigate.
In order to create your paper trail, send a letter to the clerk of court where the bankruptcy was filed. In the letter (no email) request what the procedure is for verifying records with the credit reporting agencies. Enclosed in the letter have a SELF-ADDRESSED STAMPED ENVELOPE.
Now you will have proof on paper that the actual courts do not verify information directly with the credit reporting agencies.
Send the credit reporting agencies the following procedural request letter:
According to the FCRA, Section 611, paragraph (6)(B)(iii) regarding the procedures of reinvestigation states “…if requested by the consumer, a description of the procedure used to determine the accuracy and completeness of the information shall be provided to the consumer by the agency, including the business name and address of any furnisher of information contacted in connection with such information and the telephone number of such furnisher, if reasonably available…”
Please note, a third-party furnisher of information, such as PACER, LEXIS NEXIS, or an alleged creditor does not meet the standards set by the FCRA, Section 611, paragraph (6)(B)(iii) ONLY the Bankruptcy Court should be the furnisher of information, not a third party source. According to the bankruptcy court (letter attached) they do not verify bankruptcies with the credit bureaus. demand direct , not third-party, proof according to FCRA, Section 611, paragraph (6)(B)(iii) or deleted the bankruptcy from my record according to FCRA, Section 609 a (2).
Please provide me with:
- The courthouse name;
- the name of the person who verified the bankruptcy;
- the court address;
- the court telephone number; and
- the documentation used to verify the dispute.
Have the letter notarized and AWAYS send it “certified mail with return receipt requested”.
The credit bureaus must respond within 15 days with the information. They will respond only with the name and address of the courthouse. But this is good news! send a second letter, be more demanding and sound more litigious (without a direct threat). REMEMBER NEVER LIE, JUST DEMAND PROOF.
ALWAYS Have the letter notarized and AWAYS send it “certified mail with return receipt requested”.
Bankruptcy Removal Option “D”
This is if your court DOES verify your bankruptcy. The chance is small, but it does happen.
From 30 days to two years your bankruptcy file is moved from the local court to a central storage facility. Go to your local court and request to see your file, they will have to order it and have it brought back to the court.
Have them order the bankruptcy documents. it generally takes about a week to arrive. Once it arrives the court clerks will put it in a special place and notify you that it has arrived.
Three days after you order your BK file, send a dispute to the credit bureaus. The court clerks will then call the “storage facility” where your bankruptcy file should be – and discover it won’t be there…
Stalling is the key. Once your file arrives back to the local court, they will call you to come view it. It is very important that you delay as long as possible. Credit bureaus have 30 days to verify any disputed debts so it’s very important you keep your bankrupTcy file in that “holding room” for as long as you can.
You’re busy at work, out of town at a meeting, your car is in the shop, whatever you can to keep that file on hold the entire 30 days while the credit bureau tries to verify its existence. Since you have it they cannot verify it, so they have to delete it.
Bankruptcy Removal Option “E”
Verification according to Black’s Law Dictionary is “… averment that the party pleading is ready to establish the truth of what he has set forth.” Also, it goes on to say, “The examination of a writing for the purpose of ascertaining its truth; or a certificate or affidavit that it is true.”
“Confirmation of the correctness, truth, or authenticity of a pleading, account, or other paper, by an affidavit, oath, or deposition.”McDonald v. Rosengarten, 134 111. 126, 25 N. E. ; and Summerfield v. Phoenix Assur. Co. (C. C-) 65 Fed. 296; and Patterson v. Brooklyn, 6 App. Div. 127, 40 N.Y. Supp. 581.
This means verification is sworn testimony. It can be testimony in a deposition or in court or an affidavit. The only admissible testimony is from a witness with First-Hand knowledge. A court clerk does not have first-hand knowledge. The county recorder does not have first-hand knowledge. Anyone at the credit bureau does not have first-hand knowledge. Lexis Nexis does not have first-hand knowledge. If someone verifies but they don’t have first-hand knowledge, then it’s not verification, its hearsay. And hearsay is inadmissible.
Next, is a law that applies to 3rd party collectors – FCRA §603(o)(5)(A)(i; iii). This law applies to not just 3rd party collectors, but to every entity that furnishes information to the credit bureaus.
FCRA § 603
(o) Excluded communications. A communication is described in this subsection if it is a communication
(5) with respect to which
(A) the consumer who is the subject of the communication
(i) consents orally or in writing to the nature and scope of the communication, before the collection of any information for the purpose of making the communication;
(iii) in the case of consent under clause (i) or (ii) given orally, is provided written confirmation of that consent by the person making the communication, not later than 3 business days after the receipt of the consent by that person;
So, even if the courts or recorder’s office furnished the information, other than getting a court order, they are not allowed to furnish or verify squat on your credit report without your authorization. If you have one of these public records on your credit, did you give the bankruptcy trustee your authorization to furnish information? No. Did you authorize Lexis Nexis? The courts? The county recorder’s office? Anybody? Did you authorize anyone to put negative public record information on your credit reports?
Bankruptcy Removal Option “NUCLEAR”
At this time, if nothing works, you can sue the credit bureaus. They don’t like being sued, it is expensive for them. They have to hire an attorney while you can represent yourself. They should fold and remove the bankruptcy rather than pay for the lawsuit – even if they will win. Remember, credit bureaus are private companies, and there is no profit in fighting lawsuits.
Once again, nothing works every time, but if you don’t try it is guaranteed not to happen! Persistent Pestering! It gets the job done in credit repair. I would not recommend the nuclear option until I tried the other steps SEVERAL times. It may not be a good option at all.
Make the Credit Bureaus Report Mortgage Payments After Bankruptcy
A person who has a Chapter 7 bankruptcy but does not sign a reaffirmation agreement for a mortgage may not see the loan on his credit reports. This is the bogus reason the mortgage company uses “The debt was not officially reinstated in bankruptcy court.” The debtor can still pay the mortgage per the original loan agreement, and the lender must adhere to all of the mortgage terms and relevant state laws.
Why is it bogus? It is a way the mortgage companies try to force debtors to reaffirm their mortgages – or make their bankruptcy customers suffer. When asked, they ALWAYS blame the bankruptcy attorney (and get great joy at making the lawyers life harder). If you don’t reaffirm your mortgage you can walk away from it at any time and pay no fines or fees. Since you just filed bankruptcy, it is safe to assume your finances are not great and you may have too much house for your wallet. If you reaffirm the mortgage, your payments will probably be reported, but you lose the protection of bankruptcy. Generally, no lawyer will have a client reaffirm a mortgage, and if they did, most judges would not sign off on it. It is tantamount to malpractice. So what can you do?
You can wait and refinance it later when you have good credit. You can renegotiate a better deal with the creditor and pray the bankruptcy judge signs off on the reaffirmation. Or, you can force the lenders and credit bureaus to give you credit for all of your post-bankruptcy payments. Here is how you force the issue.
Request a payment history from the lender (the mortgage company or car finance company). Lenders are required by law to give you a payment history once per year if requested. Just call the customer service number and request a payment history.
Take this payment history and use it to dispute the missing payments on the loan with the 3 credit bureaus. Make sure that you attach the payment history when you make the dispute.
You may have to do this once a year, because the lender may not start reporting the payments even after you successfully dispute it with the credit bureaus.
I AM NOT A LAWYER and this is not legal advice.
Give Kerry a call (919) 355-8367if all this is too much for you to do – he’ll do it for you!