Removing bankruptcies from your credit report can be tough, but some companies really shine at it. Lexington Law and Credit Saint stand out for their strong legal strategies and proven success. They offer personalized services to help you tackle this serious financial mark and aim to give you a fresh start.
Bankruptcies can drastically affect your credit score and block future financial opportunities if you ignore them. These companies use detailed legal strategies and personalized plans to challenge and potentially remove these negative items. They focus on the specifics to help you achieve a clearer credit report and a better financial future.
If you want personal, expert help, call The Credit Pros. We offer a simple, no-pressure chat to review your full 3-bureau credit report. Our team will create a plan based on your unique situation, working hard to improve your credit score and financial standing. Don’t let bankruptcy hold you back—let’s tackle it together.
Filing for bankruptcy can negatively impact your credit scores and report for years. A bankruptcy can remain on your credit report for up to 10 years from the date you initially filed. This can make it difficult to get approved for new credit loans mortgages, apartments, and more. However, credit repair companies advertise that they can help remove bankruptcies from your credit reports before the 10 years is up. Is this really possible?
How Bankruptcies Impact Your Credit
There are two main types of personal bankruptcy filings – Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy, most of your debts are eliminated and you are no longer responsible for repaying them. Any assets that are not exempt may be liquidated to pay creditors. In a Chapter 13 bankruptcy, you enter a 3-5 year repayment plan to pay back a portion of your debts.
Both types of bankruptcies can heavily damage your credit. When you file, the bankruptcy will appear in the public records section of your credit reports at all three major credit bureaus – Equifax, Experian, and TransUnion. Bankruptcies are one of the most detrimental items that can appear on a credit report. They will cause your credit scores to plummet because they represent a high risk of non-payment to lenders.
For up to 10 years, bankruptcy will show up on your credit report. You will have a Chapter 13 bankruptcy for 7 years after you finish the repayment plan. A Chapter 7 bankruptcy will stay on your record for 10 years from the date it was filed. The public record of bankruptcy can’t be erased until 10 years have passed.
Do Credit Repair Companies Actually Remove Bankruptcies?
Many credit repair companies advertise that they can remove bankruptcies and other negative items from your credit reports. However legally they cannot have accurate information removed before it’s supposed to fall off your reports. Credit repair companies cannot force the credit bureaus to take off real bankruptcies earlier than the mandated reporting periods.
Credit bureaus are required by the Fair Credit Reporting Act (FCRA) to follow strict rules when they report and take down credit information. They can only report 100% factual, verifiable information. If a record is wrong or can’t be verified, the bureaus have to get rid of or fix it. But this doesn’t apply to public records that are true, like bankruptcies.
So how do some credit repair companies lie when they say they can get rid of bankruptcies? Here are some of the things they do:
- Disputing and trying to verify outdated information related to the bankruptcy – hoping the bureaus will just remove the entire public record due to missing information
- Alleging the bankruptcy reporting is inaccurate – for example, wrong filing date or mistaken identity
- Flooding the bureaus with so many disputes and requests, that some items accidentally get removed or fall through cracks
However, none of these tactics can force the credit bureaus to remove a legitimate bankruptcy ahead of schedule. At best, the bureaus may remove then re-add the bankruptcy later, which essentially does nothing. The Fair Credit Reporting Act protects the bureaus from having to permanently remove factual negative information before the reporting time limit is up.
Are There Any Legal Ways to Remove a Bankruptcy Early?
While credit repair companies cannot legally remove real bankruptcies, there are some cases where a bankruptcy can be taken off your credit reports early:
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Inaccurate information: If the bankruptcy record shows the wrong filing type, date, amounts owed, or contains other errors, you can dispute it and potentially have it removed until the creditor provides updated, verifiable information.
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Discharged early: In some cases, the court may discharge a Chapter 13 bankruptcy early if you complete the repayment plan ahead of schedule. This means it could potentially be removed from your credit a few years before the 7 years.
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Settlement: If you file for Chapter 7 bankruptcy, you may be able to work out a deal with your creditors to pay some of your debts. If all of your creditors drop their claims, the bankruptcy might be thrown out and removed from your records. This is very rare and difficult to achieve.
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Expungement: You can request to have a bankruptcy expunged from public records if it was filed due to identity theft or if you have evidence you did not qualify to file in the first place. If approved, it could be removed from your credit reports.
As you can see, early removal is only possible in special cases when the bankruptcy record is inaccurate or can be eliminated from public records. A true, discharged bankruptcy will remain on your credit for the full 7-10 years mandated by law.
Improving Your Credit With a Legitimate Bankruptcy Still Listed
Since most legitimate bankruptcies cannot be removed early, the best approach is to focus on rebuilding and improving your credit even with the bankruptcy still listed. Here are some tips:
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Keep existing credit accounts open and in good standing. Having long, positive payment history helps offset the bankruptcy.
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Pay all bills on time going forward. Your payment history makes up a large chunk of your credit scores.
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Limit new credit applications. Too many new accounts can hurt scores and show high risk after bankruptcy.
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Become an authorized user on someone else’s account. This builds positive history with no debt obligation.
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Add secured cards – these require a refundable deposit and are easier to get after bankruptcy.
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Include both secured and unsecured cards for a mix of accounts.
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Maintain low credit utilization by keeping balances low compared to limits.
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Consider credit-builder loans to add positive repayment history.
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Wait at least 6 months after discharge to apply for any major new credit like an auto loan.
Focusing on responsible credit behaviors will help your scores slowly improve over time. And maintaining a strong credit profile in the years after bankruptcy will make it much easier to get approved for credit again once the bankruptcy falls off your reports.
Criteria For Choosing A Bankruptcy Removal Company
You need to carefully evaluate several factors when choosing a bankruptcy removal company:
• Look for firms with a proven track record of successful bankruptcy removals. Ask about their specific process and success rates.
• Ensure the company operates within the bounds of the law. Be wary of guarantees that seem too good to be true.
• Seek clear, upfront cost information without hidden fees.
• Avoid companies promising unrealistically quick results. Removing legitimate bankruptcies can be challenging.
• Choose a firm that communicates clearly and responds promptly to your questions.
• Verify the company’s licenses, certifications, and professional affiliations.
• Read feedback from past clients to gauge satisfaction levels.
• The company should clearly outline their methods for disputing inaccurate entries or negotiating early removals.
• Ensure they understand local regulations and time limits for bankruptcies to naturally fall off credit reports.
On the whole, by thoroughly vetting potential companies using these criteria, you’ll increase your chances of finding a reputable partner to help improve your financial standing.
Worried about legal action? Contact us to understand your rights. Chat with us now
What Fees Do Bankruptcy Removal Services Usually Charge
Bankruptcy removal services usually charge fees that vary widely depending on the type of bankruptcy and the complexity of your case.
For Chapter 7 bankruptcy, you can expect to pay between $1,450 and $2,000. This fee range covers both court and attorney fees.
For Chapter 13 bankruptcy, the costs are higher due to the complexity and length of the proceedings. Attorney fees typically range from $2,500 to $5,000, averaging around $3,000. Additionally, you will need to pay a filing fee of $313. You might also incur costs for credit counseling and financial management courses, usually between $20 and $50 per course.
For Chapter 11 bankruptcy, which is often used by businesses, initial fees can be around $10,000 for individual or small business cases. Lawyers in Chapter 11 cases typically charge hourly rates ranging from $125 to $720. The court filing fee is $1,738.
These fees can vary based on your location, the lawyer’s experience, and your case’s complexity. Always consult a bankruptcy attorney to get a precise estimate for your specific situation.
In a nutshell, you should be prepared for fees ranging from $1,450 for Chapter 7 to much higher costs for Chapter 11, depending on various factors like complexity and location.
Pro Tips for Removing Bankruptcies from Credit Reports + FREE Dispute Letter Templates
FAQ
Can credit repair remove closed accounts?
Closed accounts can be removed by disputing them with credit bureaus. In many cases, the data furnisher (whoever put the account there, ie. Wells Fargo) will not respond to disputes on older, closed, paid accounts, OR if they do, they may not have enough paperwork to properly prove the debt.
How to get a 700 credit score after bankruptcies?
Open new credit accounts, such as a secured credit card, strategically, and prioritize making payments on time every month. It’s also important to focus on adopting good financial habits for the future. If you need help rebuilding your credit after bankruptcy, consider contacting a credit repair agency.
How do credit repair companies get items removed?
The only way to get them removed permanently is to negotiate a pay for delete in which you agree to pay the balance (or a negotiated settlement) and they agree to delete the accounts from your report. Get the agreement in writing.
What do credit repair companies do that I can’t do?
Credit repair companies typically dispute items with the credit bureaus. However, they can only legally remove inaccurate, outdated, or unverifiable information. If the item is accurate and current, even the best—or worst credit repair companies—cannot remove it. Be cautious of anyone claiming otherwise.