There’s a lot of confusion concerning exactly how long a bankruptcy filing can legally stay on a person’s credit report.

Ask that question and you’re sure to get quite a few different answers. Some will say ten years. Others will say ten years for a Chapter 7 and seven years for a Chapter 13.

The law is actually very clear on this particular issue. The Fair Credit Reporting Act (“FCRA”) directs credit reporting agencies to remove bankruptcy case information from all consumer reports ten years after the date of entry of the “order for relief.” See 15 USC 1681c(a)(1).

The FCRA doesn’t distinguish between Chapter 7 and Chapter 13. However, many credit counselors cite an “unofficial policy” of the three largest credit reporting bureaus (Equifax, Experian, and TransUnion) to remove chapter 13 filing information from your credit report after seven years.

There’s also confusion over when the FCRA’s ten year time period begins. Some say the information must be removed ten years after the date of the discharge. However, the United States Bankruptcy Code states that the order for relief date is the date the bankruptcy petition was filed, so the ten year period must is measured from the bankruptcy filing date, not the discharge date. See 11 USC 301.

Therefore, information about your bankruptcy must be removed from your credit report no later than ten years after the date you filed bankruptcy. For example, if you filed bankruptcy on January 1, 2010, the bankruptcy must be removed from your credit report no later than December 31, 2019.

I am often asked how filing bankruptcy will impact a person’s credit score. My answer generally surprises people because my experience has been that filing bankruptcy doesn’t usually hurt a person’s credit. Here’s why.

Most people who file bankruptcy already have poor credit. Their credit report contains late payments, charged-off accounts, lawsuits, garnishments, repossessions, foreclosures, etc. Their credit is already dinged up enough so that they can’t borrow money at a decent interest rate. For these people, filing bankruptcy will do no harm to their already poor credit. In fact, filing bankruptcy very well may improve their credit score. Say what?! You heard me. Filing bankruptcy can actually help improve a person’s credit score.

Your credit report is largely wiped clean when you receive a bankruptcy discharge. Your high balances are removed as are any late payments or records of unpaid debts. And the accounts included in the bankruptcy will be marked as “Included in Chapter 7 Bankruptcy” or “Included in Chapter 13 Bankruptcy” depending on which type of bankruptcy you filed.

In the final analysis, your credit score alone shouldn’t affect whether or not you decide to file bankruptcy. “You have to be realistic about your ability to get back on your feet financially,” says credit expert Gerri Detweiler, author of The Ultimate Credit Handbook. If your debt payments are crushing you, bankruptcy will give you a much-needed fresh start. And if you pay your bills on time after bankruptcy, your credit score could be back in the 700s within two or three years.

If you’re struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

Source: SmartMoney.com

I really like some of the commercials done by the folks at freecreditreport.com. They’re just plain funny.

I think they’ve made a total of six commercials to date, but I’m partial to two in particular.

Remember the first one with the guy dressed up like a pirate in some restaurant serving chowder and iced tea and fish to tourists in t-shirts. And then in the next commercial he’s singing about how he’s stuck living in his in-laws’ basement instead of having a nice home in the suburbs all because of his wife’s poor credit.

There’s one big problem with the commercials though. While they’re humorous and have a catchy tune, they also lead people to believe they can go online to www.freecreditreport.com and get their credit report with no strings attached. What people don’t understand from the commercials is that to get the credit report, they have to sign up for a trial membership in a credit monitoring service. And if they don’t cancel that service within the seven day trial period, they’ll be stuck paying $14.95 per month.

If yoo’d like to get your credit report without spending a penny, you can. Thanks to the Fair and Accurate Credit Transactions Act (FACTA), each of the big three credit reporting agencies (Experian, Equifax and Trans Union) must, when asked, provide every consumer with one free annual credit report.

To get a credit report that really is totally free, simply call the official toll-free number: (877) 322-8228 or go to annualcreditreport.com and order your report online or print out a form and put your request in the mail.

I also wrote about annualcreditreport.com in a previous post called “Check Your Credit Report After Receiving Your Bankruptcy Dishcarge.”

During bad economic times, companies spring up out of nowhere claiming to be able to fix bad credit reports.

They target consumers with poor credit histories, promising to clean up their credit reports so they can get a car loan, a home mortgage, insurance, maybe even a job.

They tell you they can rid your credit report of negative information — even if the information is accurate and current.

Be on your guard so that you don’t become a victim of these con artists and their credit repair scams. They just want to steal your hard-earned money. When they come calling, tell them to get lost!

No matter what these “credit repair companies” tell you, the simple fact is that no one can remove accurate negative information from your credit report.

The truth is this – there is no quick fix for bad credit. But you can improve your credit report yourself if you’re willing to put in the time and effort it takes.

For more information on how to protect yourself from these credit repair scams, read “Don’t Fall for Credit Repair Schemes.”

Source: Tulsa World.

After filing bankruptcy and receiving a discharge it is a good idea to obtain a credit report to make sure that the bankruptcy has been properly reported and that your debts are showing the proper status and/or have been removed. If your credit report has errors or discharged debts have not been removed, your bankruptcy attorney should be able to help you get your report corrected or guide you in what steps to take.

Under a recent federal law you are entitled to one free credit report per year from each of the three consumer credit reporting agencies. Each of the bureaus may have different information so you should check all three and correct any inaccuracies.

To get your free credit report, click on the link below:

Annual Credit Report Request Service

You can also contact any of the credit bureaus directly by clicking on the links below or calling the number listed:

Visit Equifax or call 1-800-685-1111
Visit Experian or call 1-888-397-3742
Visit TransUnion or call 1-800-916-8800

If you are one of the few people who file bankruptcy with a good credit report and high credit score, filing bankruptcy will result in an immediate and substantial drop in your credit score. Over time, your credit score will rise, and if you make wise credit decisions and timely pay your debts, your score can again reach lofty heights.

However, truth be told, the vast majority of people who file bankruptcy already have poor or bad credit. Their credit reports usually show an abundance of late payments, high balances, and charged-off accounts. Bankruptcy will do no harm to these people whose credit is already shot.

Believe it or not, filing bankruptcy can actually result in an improved credit score for many consumers. Why? To start with, a person’s credit report is largely wiped clean when he or she files bankruptcy. High balances are removed as are any late payments or records of unpaid debts. Instead, the accounts included in the bankruptcy will be marked as “Included in Chapter 7 Bankruptcy” or “Included in Chapter 13 Wage Earner Plan,” depending on which type of bankruptcy is filed.

For more on how filing bankruptcy can actually raise a credit score, read this article from SmartMoney Magazine.

If you are struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

The Fair Credit Reporting Act says that a bankruptcy must be removed from a consumer’s credit report no later than ten years after the bankruptcy case was filed. See 15 USC 1681c(a)(1).

However, the “unofficial policy” of most credit reporting agencies is to report a bankruptcy filing for between seven to ten years. A Chapter 13 bankruptcy (repayment plan) will usually be reported for seven years while a Chapter 7 bankruptcy (liquidation) will usually be reported for ten years. The seven or ten years is counted from the date your bankruptcy case was filed and not the date your discharge order was entered.

If you are struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.