There are new Expert Level Tactics for removing Bankruptcies from Credit Reports, and today, I'm gonna teach you how to get it done!
Bankruptcy is the single most damaging item that can appear on a Credit Report. They make it nearly impossible to get approved for loans. They can prevent you from getting jobs, and depending on the type of Bankruptcy, they can stay on your Credit Report for 7 to 10 years!
But worst of all, most Bankruptcies aren't caused by bad financial habits. No. They're the result of one unexpected major life event.
And considering 63% of Americans live paycheck to paycheck, it's not hard to guess why these Bankruptcies happen.
In 2005, when Personal Bankruptcies spiked to over 2 MILLION cases, 46% listed medical-related expenses as the reason for filing. Other reasons included job loss, reduced income, and divorce.
A Bankruptcy is an extremely stressful situation, and it's true your finances will need to be rebuilt from scratch, but it can be done! And the first step to making a full recovery is removing the Bankruptcy from your Credit Report!
HOW THIS RELATES TO US
For anyone new to Credit Repair, Bankruptcy is a legal process that allows individuals or businesses to eliminate, restructure, and repay their debts under the protection of a court. There are two main types of Personal Bankruptcy: Chapter 7 and Chapter 13.
CHAPTER 7 is considered a "liquidation bankruptcy," which involves selling all your non-exempt assets to repay your creditors. They stay on Credit Reports up to 10 years after the filing date.
CHAPTER 13 is a "reorganization bankruptcy," which involves creating a repayment plan to settle debts over a three to five-year period. They stay on Credit Reports up to 7 years after the filing date.
According to FICO Scoring Models, the impact of a Personal Bankruptcy depends on what your Credit was like before you filed. And the higher your Credit Score was, the further it will fall, with some high scores dropping over 200 points!
Now, Personal Bankruptcies have steadily declined since 2005, but experts are now predicting that an increase is coming as a result of the Pandemic.
Court closures, PPP Loans, and other Pandemic related Relief policies slowed bankruptcy filings, but we should expect to see a lot more soon.
THE THING TO REMEMBER
Bankruptcies are filed with the courts, not the Credit Bureaus. They are Public Records. Public Records are different from most negative items that appear on Credit Reports because they are about court-related matters.
The courts don't actually send these Public Records to the Credit Bureaus. The Credit Bureaus buy the records from companies like LexisNexis, which collects the information from public record databases like PACER.
If this sounds like a strange system, you're right! It is! But you can actually use this strange system against itself to remove items from Credit Reports!
WHY THIS IS IMPORTANT
When the Credit Bureaus receive Public Records from LexisNexis, they often list the Furnisher of information as the "Recorder of Deeds," the "Clerk of Courts," the "Magistrate," or the "Municipal Court."
They do not list the actual Furnisher!
This amounts to false reporting, which directly violates the Fair Credit Reporting Act and provides a perfect reason to Dispute the Bankruptcy.
WHAT YOU NEED TO KNOW
As always, you start the Credit Repair process by Disputing any incorrect information that appears on the Credit Report. Beyond that, there's one Expert Level Tactic for Removing Bankruptcies from Credit Reports, and I'm going to break it down into 6 Easy Steps.
HERE'S HOW IT WORKS
STEP 1: Sign up for a PACER account.
PACER is a public records database that anyone can access for free, and companies like LexisNexis use it to gather our data.
STEP 2: Contact LexisNexis and request a Consumer Disclosure Report.
Thanks to the FCRA, they're required to provide you with a copy for free.
STEP 3: When you have the PACER account records and the LexisNexis Consumer Disclosure Report, compare the information in both.
Look for inconsistencies and Dispute them with LexisNexis just like you would with a Credit Bureau. They follow the very same rules.
If you're able to remove the Bankruptcy from the LexisNexis Report, your odds of removing it with the Credit Bureaus increase dramatically!
STEP 4: Dispute the Bankruptcy with the Credit Bureaus.
Do this just as you would any other item. If the Bureau verifies the information, move on to the next step!
STEP 5: Send a simple letter addressed to the Clerk of the Court where you filed the Bankruptcy.
There is no need to get into details or specifics. Just say something like:
"I have a record from your court appearing on my credit report. I've disputed the item with the Credit Bureaus Equifax, Experian, 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."
Send this letter to the Clerk of the Court with a self-addressed, stamped envelope and your return address to make it easy for them to respond.
The Clerk of the Court will usually respond with a letter explaining (what you already know) they DO NOT report to the Credit Bureaus.
Now you're cooking with gas!
STEP 6: Make a copy of the letter you received from the Clerk of the Court and send it to the Credit Bureaus along with a demand for deletion.
It doesn't have to be written the exact same way, but it should be something like this:
"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 initial 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."
The Bureaus know the law and understand they have a potential violation if they don't remove it. So they will typically respond with a deletion.
If the Bankruptcy is deleted, you'll soon be able to qualify for loans and lines of credit without dealing with the predatory, high-interest rates that keep people with bad credit stuck in the never-ending cycle of debt.
If the Bureaus refuse to delete the Bankruptcy, despite your valid reason for removal, it's time to file a complaint with the CFPB because you are entitled to fair and accurate reporting.
If you'd like copies of these Public Record Dispute Letters, you can download them FREE at CreditRepairCloud.com/Public-Record-Dispute
MY FINAL POINT
Bankruptcy is the single most damaging item that can appear on a Credit Report, but that also means removing them has the greatest positive impact on someone's life.
Disputing a Bankruptcy may not be the fastest process, but success is a major step to financial recovery. So it's always worth the effort.
I'll end by saying…
If you don't already have a Credit Repair Cloud account, check it out. It's the software that most Credit Repair businesses in America run on. Just sign up for a 30-Day Free Trial at CreditRepairCloud.com/freetrial
And if you'd like to change lives and grow your own credit repair business, check out our Credit Hero Challenge!
It's an amazing program, and we've got another challenge starting in a few days, so grab your spot right now at CreditHeroChallenge.com!
So take care, Credit Hero!
Keep Changing Lives!