How to Dispute A Bankruptcy
Dealing with bankruptcy is tough, but you are not alone. Bankruptcy comes with consequences, as far as your credit is concerned, and even after it has been discharged, you will have some work to do. How do you repair your credit after bankruptcy? What do you need to know?
The length of time depends on the type of bankruptcy. A Chapter 13 bankruptcy will be on your report for 7 years while a Chapter 7 bankruptcy will be on your report for 10 years. However, there is a way to get a bankruptcy removed from your credit report before 7 or 10 years and you can still get credit.
Waiting a few years to get credit may be too much for some people, especially because even after you qualify for credit you will have to pay crazy interest rates. Instead of waiting too long and paying ridiculous rates, work to reduce the negative effects of your bankruptcy.
You will be able to repair your credit and receive great credit offers. A bankruptcy on your credit report can damage your credit score in a huge way. It will take 130-150 points from your FICO if you have a score of 680 and 220-240 points if your credit score is 780. This drop will, most likely, cause creditors to decline your credit applications and if you qualify, they will charge high interest rates.
Moreover, the amount you can borrow will be limited. Even when filing for bankruptcy is your best option, you need to be aware of the implications. The first and most important step would be to remove the bankruptcy from your credit report. Another important thing is assessing and changing your financial habits, so you never have to file for bankruptcy again.
Check your income and expenses and put something into your emergency fund. One habit you really need to cultivate is the habit of paying your bills on time. Your payment history is the biggest determinant of your credit score. As you strive to repair your credit, do not accrue new debt. At least, filing for bankruptcy gets most of your debt discharged.
Credit bureaus will have you thinking it is not possible; but you can get a bankruptcy removed. If you file a dispute concerning your bankruptcy, file three different disputes with all three bureaus. They are separate companies and you cannot file one and expect it to apply to them all. In your dispute, state the facts and do not be guided by your emotions. It is totally possible to do this on your own.
However, the process can be tedious and lengthy and positive results are not guaranteed. You dispute the bankruptcy by asking the bureaus how they verified your bankruptcy or by pointing out inaccurate information in your credit report.
The bureaus are required by law to respond within 30 days. If they do not verify it, they will send you a written statement and you can use it to have the bankruptcy removed.
Before you dispute, suppress your profile with LexisNexis. After you suppress your file, freeze your file with LexisNexis as well other third-party companies that collect consumer information. Now you want to obtain a document from the local bankruptcy clerk saying they do not report to third parties. This can also be found on their website.
All files must have a credit freeze prior to sending a 609 Dispute Letter to the three major credit agencies Equifax, Experian, Transunion. You can also include public record removal letters.
Innovis Security Freeze Options
1-800-540-2505
Advanced Resolution Services A.R.S.)
1-800-392-8911 (no website)
Sagestream (formely ID Analytics)
1-888-395-0277
LexisNexis
1-888-497-9172
Corelogic/CREDO
1-877-532-8778
http://www.corelogic.com/solutions/credco-consumer-assistance.aspx (information only)
Factor Trust
1-844-773-3321
Clarity Services Inc.
1-866-390-3118
Microbilt
1-800-884-4747 option #5
1-888-222-7621
http://www.microbilt.com/us/consumer-affairs
(Freeze all third-party companies prior to disputing a bankruptcy)
Below is an example of what you should receive from the bankruptcy courts before disputing with the three major credit bureaus. Also, read below to send an email to Pacer. Make sure you email them for your records. Below is what they sent me. Hi, my name is (place your name) and i wanted to know the procedure or the process you use when validating and reporting public records to credit bureaus. Thank you.
Public Access to Court Electronic Records (PACER) is an electronic public access service of the United States Federal Courts that allows users to obtain case and docket information from Federal Appellate, District and Bankruptcy courts through the Internet. PACER does not contact consumer reporting and credit reporting agencies. PACER simply provides access to federal court records.
Thank you,
PACER Service Center
Phone: 210-301-6440
Toll Free: 800-676-6856
For Frequently Asked Questions: http://www.pacer.gov/psc/hfaq.html
For Account Information: https://www.pacer.gov/psco/cgi-bin/psclogin.pl
Below is an example to include with the 609-dispute letter. This is after you place a security freeze with third party companies.
Consumer Credit Reports Information
All bankruptcy case filings appear for 7-10 years from the date the case was filed on a credit report. Federal Law 15 U.S.C. §1681c, “Requirements relating to information contained in consumer reports,” provides information regarding bankruptcy cases and what can be disclosed. Bankruptcy records are public records unless sealed, and all information contained in them can be retrieved by anyone, including credit reporting agencies.
The U.S. Bankruptcy Court is not responsible for credit reports. Any disputes with a credit agency must be resolved by the debtor and that agency. If you wish to obtain a copy of documents filed in your case, you may set up an account with www.pacer.gov, or you may come to our office at 701 Broadway, Nashville, TN 37203. If you come to our office, the price for copies varies.
If you print the documents, it is $0.10 per page. If the Clerk prints the documents, it is $0.50 per page. The Clerk accepts cash, cashier’s check, or money order. Cashier’s checks and money orders must be made payable to U.S. Bankruptcy Court. Filing for bankruptcy is never anyone’s first option. However, sometimes it is the best thing you can do to help your financial situation.
It is a negative account on your credit report, but it frees you from debt. Here is all you need to know about bankruptcy. Bankruptcy is basically the process of eliminating debt or satisfying it under different terms. It is a serious decision but if you cannot pay back everything you owe, it can set you free from debt. The two major types of bankruptcy are Chapter 7 and Chapter 13. The other one is Chapter 11— it is usually for businesses but can also apply to individuals.
Chapter 7 bankruptcy is for people who meet specific income guidelines and cannot afford to satisfy the debt using a repayment plan. There is a means test that you must pass to qualify. It is the fastest and cheapest option. With this type of bankruptcy, your personal property is likely to be sold off to satisfy the debt instead of you making payments. If you want to protect some belongings from being sold off, you need to apply for exemptions.
This depends on the debt you owe. You can use a Chapter 7 delinquency to delay a foreclosure process. As for unsecured debts like personal loans or credit cards, you may be able to file for an exemption on your car, home, or other major items to protect them from being auctioned or repossessed. Your state laws will determine the eligible exemptions.
Chapter 13 bankruptcy is for people who make a lot of money, preventing them from qualifying for a Chapter 7. Its advantage is that your property will not be sold off, but you will have to pay your lenders over the next three to five years. The repayment plan varies. All secured debts, priority debts, and administrative fees must be repaid in full for you to keep your property. Your income determines the duration of the plan and the amount you will pay on unsecured debt. Chapter 11 is mostly for companies, but individuals may apply. You can qualify if your debt level surpasses the limits of Chapter 13.
Chapter 11 is like Chapter 13 in most ways such as security of property from repossession. The main difference is that you must repay your debt over a five-year period. There is no option to reduce the period. A bankruptcy is bad for your credit score. It can deduct 160 to 220 points from the score. A Chapter 13 bankruptcy remains on your report for seven years. A Chapter 7 can stay for ten.
The effects, however, lessen with time. Getting credit immediately after a bankruptcy will be a challenge; but with time, you will begin to qualify. You may still have to pay crazy interest rates. A mortgage will be the hardest to get. Is Bankruptcy the Best Option for You? There is no simple answer to this question and the decision lies with you. Talk to a credit counselor so they can walk you through it.
Most importantly, figure out how you got here and how you can avoid such a pitfall next time. Even though a bankruptcy will linger on your report for a while, there are useful tips to help you improve your score and become eligible for credit, even with the bankruptcy still on your file. This is no easy task, but it is possible. Talking to a professional will provide knowledge and experience and could get the account permanently deleted from your report before the seven years.
In the process, they can get other negative items removed from your report as well. Some people get into financial troubles due to situations that are out of their control such as medical emergencies or a job loss. Other people get into trouble because of careless spending. Whatever the reason for filing for bankruptcy, try your best to make sure it never happens again.
If you have a problem with overspending, come up with a monthly budget and stick to it. If an emergency is the reason for your financial hardship, consider setting aside a rainy-day fund. Even if money is tight, find ways to help you spend less so you can save. A credit card is a quick and effective way to improve your credit.
You may be hesitant because more debt is not exactly what you are looking for, but a positive payment history affects your score more than any other component. Instead of charging all your expenses to your card, pick a single bill to pay with your credit card every month and then repay the balance immediately. A long history of on-time payments will start to increase your score.
How do you get a credit card with a bankruptcy? You have the option of both secured and unsecured credit cards (even immediately after a bankruptcy). A secured credit card requires you to place a refundable deposit equal to your credit limit. The deposit is security and you will be paying for the card balance out of your own pocket. Ensure that the credit card issuer reports your monthly activities to the three credit bureaus. Do not apply for multiple credit card applications as this could hurt your score even more.
Before you start thinking about a car, be responsible with your credit card for at least six months. This shows that you can repay your debts and improve your score. Also, set aside some money to use as a down payment, even if you are eligible for the full amount. Remember you will, most likely, must pay a higher interest rate.
Consider a used car rather than a brand new one. Buying a house will have to wait for a while depending on the type of bankruptcy you filed for and the loan you want. You will have to get permission from the court and have a 12-month history of on-time payments. You might also have to pay a higher down payment and interest. Because of this, spend the seasoning period making responsible financial decisions and rebuilding your credit.
