Remove Bankruptcy and Charge Off From Credit Reports

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Bankruptcy Petition
HIGHLIGHTS
  • A bankruptcy filing will appear on your credit reports.
  • Review your credit reports to make sure your bankruptcy was reported accurately.
  • Get no-cost copies of your credit reports at AnnualCreditReport.com

How To Remove Charge-offs and Bankruptcy From Credit Reports

Charge-off (sometimes called “write-off”) is an accounting term used by creditors when they move a delinquent account from its accounts receivable books to its bad debt ledger. This usually occurs between 180 and 240 days from the date of the last payment. The fact that an account is charged-off does not mean the debt may not be collected later. The charge-off date also does not correspond to the statute of limitations on collecting a debt, or the date that an entry on a credit record must be removed. All three dates or deadlines are independent of each other and have different meanings.

Because an account is charged off does not mean the creditor lacks a legal right to collect the debt. To the contrary, the creditor may move the account to its own internal collections department, or sell the debt to a third-party collection agency.

Bankruptcy and Credit Reports

Generally speaking, any account included in a bankruptcy filing will appear on credit reports as “included in bankruptcy,” and reflect a $0 balance. It should not appear as open and past due. To correct this problem, you should first pull a copy of your credit report from each of the three major credit bureaus (Equifax, TransUnion, and Experian), then carefully review the reports to identify which discharged accounts are being reported inaccurately.

Get free copies of your credit reports at AnnualCreditReport.com, a Web site sponsored by the credit bureaus in compliance with federal law allowing all consumers to obtain a no-cost copy of each bureau’s credit report once every 12 months. Next, dispute the incorrect listings with the credit bureaus. See the Federal Trade Commission document FTC Facts for Consumers: How to Dispute Credit Report Errors for more information.

When disputing an account discharged in bankruptcy, include a copy of your credit report showing the inaccurate listing, as well as a copy of the order of discharge from the bankruptcy court, to show that the same account appearing on your report as delinquent was discharged in your bankruptcy filing. Once the credit bureaus receive your dispute letter, they should forward the documents to the creditors in question so the creditors can either challenge the disputes or correct the inaccurate listings. Given the fact that these debts were discharged in bankruptcy, there is no reason that the accounts should not be updated to reflect an accurate status. Having these accounts correctly listed on your credit reports should reduce their negative impact on your credit score, helping you rebuild a credit score after a bankruptcy filing. Although an account discharged in bankruptcy is not good for your credit score, having both a bankruptcy and delinquent balances on your credit report is usually worse.

Credit reports can be inaccurate, so it is important to review your credit profile regularly to verify all of the information reported by your creditors is correct. Carefully monitoring your credit history and disputing inaccurate items can increase your credit score significantly, which could save you thousands of dollars in interest on a mortgage, auto loans, and other forms of credit. To learn more about credit scoring and credit reports, visit the Credit Solutions section of Bills.com.

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Comments (28)


Ann marie M.
Absecon, NJ  |  May 31, 2012
My husband filed for bankruptcy due to unemployment (now back to work) and was discharged this spring 2012. We had two joint card cards. Both cards are shown as being included in the banruptcy on his credit report but my credit report shows both as being charged off. We have a letter stating that all debts were included and discharged including those two credit cards. I don't work & stay home with kids and my credit score is now ruined. How will this affect me? Will those companies come after me?
Bills.com
May 31, 2012
I will assume the credit card accounts were joint accounts, and that you were not just an authorized user. In theory, it is possible for the creditor to pursue all joint account holders for a debt, even if one of the joint account holders had the debt discharged in bankruptcy. In practice, however, it is not common for creditors to do so.

You asked about your credit score. See the Bills.com article Short Sale, Foreclosure & Your Credit Score to learn what Fair Isaac & Co., the creator of the FICO score, says about the time to recovery on common negative events.

If you were an authorized user, and not a joint account holder, then the derogatory will appear on your credit report but the credit card issuer has no legal claim against you.
Judy B.
March 14, 2012
I filed a BK in 2009 and included my mortgage in it. The lender has been sending me notices and statements telling me how much I owe. They are also still reporting the mortgage last to FHA even though it has been more than two years. Can I sue them for damages under the BK law
Bills.com
March 14, 2012
Review your discharge order that was issued by the bankruptcy court. If the home loan was discharged, you have no personal liability for the debt. It should appear on your credit report as a zero balance and discharged by bankruptcy. Is the lender or mortgage servicer attempting to collect the debt? If the debt was discharged, the lender/mortgage servicer is violating federal bankruptcy law, and you almost certainly have a cause of action (a legal reason to file a lawsuit) against the lender. Consult with your bankruptcy lawyer, and bring all of the documents the lender has been sending you. You may have won the lottery, so to speak.
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Judy B.
March 14, 2012
all I want is about 27k so I can leave my home....is this amt possible...I have to get a conv loan because the lender still reporting my loan to FHA as deliq.
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Judy B.
March 15, 2012
What damages can I receive for their violation?
Bills.com
March 15, 2012
Under the FDCPA, a consumer can receive "any actual damage sustained by such person as a result of such failure;" plus "... in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000;" plus reasonable attorney's fees.
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Judy B.
March 16, 2012
this would be under a contempt of court through the bankruptcy court....I am looking for punitive damages. They have been sending me notices for over 2 years and keeping me from getting another FHA mortgage.
Bills.com
March 16, 2012
You can file an action in your local state court or in federal court. Consult with a lawyer who has bankruptcy experience to learn exactly how to begin an action against a creditor who is, as you mentioned, reporting a discharged debt as current on your credit report, and is attempting to collect this discharged debt. Start with the lawyer who guided you through the bankruptcy process.
Lauren B.
Greenwood, IN  |  February 21, 2012
I have a bit of an unusual question. Is it legal for a creditor to remove a debt after its been in discharged in your bankruptcy? The reason I ask is because I had debt my attorney was supposed to reaffirm on but didn't (didn't send the paperwork in). I've kept paying on it since but the company removed it from my credit all together. It looks like I've never even had a car loan. I was hoping to just update the record for that company when it was paid off now that's not a option. Anything I can do?
Bills.com
February 23, 2012
When a debt is discharged in bankruptcy, creditors may no longer report that debt to the credit reporting agencies because the consumer no longer has personal liability for the debt. The consumer's credit report will contain a notation that reads something like, "Discharged in bankruptcy" and then there will be no additional reporting on that debt.

Reaffirmation is when a debtor tells the creditor in writing he or she voluntarily agrees to restore personal liability for a debt. A reaffirmation is a new contract. The debtor's bankruptcy lawyer must also agree to a reaffirmation. A reaffirmed debt may show a payment gap in the consumer's credit report, or may not.

I imagine you wanted the vehicle loan reaffirmed so that you would have positive history on your credit report. However, had you run into financial difficulty after your bankruptcy, you would have thanked your lawyer for not reaffirming this debt because you could have returned the vehicle with no financial repercussions. Not reaffirming the vehicle loan was a conservative course of action.

You have two options. First, send the credit reporting agencies letters indicating you want a consumer notation added to your credit report. The notation should be brief -- a sentence at the most. Second, focus on building more positive account information on your credit file.
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Lauren B.
Greenwood, IN  |  February 23, 2012
Thank you for your response. The odd thing about it is that it doesn't show anything about the car loan on my credit report, it's like the loan never even happened. I would understand them to stop reporting after my bankruptcy but to completely remove that is beyond my understanding. I talk to a lawyer about it and he had never heard of them removing an item completely.
Bills.com
February 23, 2012
Your message is further evidence the credit reporting agencies make mistakes. In this case, the effect of the mistake is neither positive nor negative but is perplexing.
Doug J.
Sappington, MO  |  January 28, 2012
There are a couple of things showing on my credit report that show twice (one showing past due amount and one showing bankruptcy) with the same company and that had happened 6 years ago during my bankruptcy, which was discharged. Is there anything I can do to get this off of my report?
Bills.com
January 29, 2012
A derogatory item will appear on the credit report for 7 ½ years from the time of your first deinquency. The bankruptcy will remain for 10 years. Generally speaking, any account included in a bankruptcy filing will appear on a credit report as "included in bankruptcy," and reflect a $0 balance. It should not appear as open and past due, though previous delinquencies may remain even after a bankruptcy filing.

For more information and tips on how to dispute the items see the Bills.com page derogatory item on credit report after bankruptcy.
Irene S.
Jackson, MS  |  January 20, 2012
I tried to get a modification on my mortgage loan, after a year I was turn down. In the meantime, I filed Chapter 13 bankruptcy which I later changed to a Chapter 7. As soon as I changed to a Chapter 7 a paid the mortgage the past due amount and became current on my loan. The mortgage company has done a charge off on my loan and I am not in foreclosure. I am still cover under Chapter 7 and have not informed me on anything. What is going on?
Bills.com
January 23, 2012
I assume you are referring to what you see on your credit report.

Once a debt is discharged in chapter 7 bankruptcy the debtor no longer has personal liability for the debt. The debt is extinguished. However, mortgages and deeds in trust are secured by property. This means the lender still has the right to foreclose if the debtor stops making payments. You do not mention where you are in the chapter 7. Did the bankruptcy court issue the discharge order yet? If no, then the mortgage lender is stayed — frozen from acting until the court issues its final discharge order. If the bankruptcy discharge was published, what did it say?

Regarding your credit report, the mortgage lender will cease to report any new information on your mortgage to the credit reporting agencies. Consult with your bankruptcy lawyer for a more detailed response to your question, which will be based on your exact circumstances.
Jose C.
Loma Linda, CA  |  October 13, 2011
I am trying to file for bankruptcy i dont have money to hire a lawyer is there free legal advise that the court offers im in California ......
Bills.com
October 14, 2011
Call your county bar association and ask for the names of the organizations that provide no-cost legal services to people in your area who have no or low income. Make an appointment with one of the organizations, and bring all of the documents you have regarding your debt to your meeting. The lawyer you meet will advise you accordingly.
Timothy A.
Louisville, KY  |  May 09, 2011
I have 5 Public Records on my credit report. All 5 debts were included in my bankruptcy and are listed as zero. Is there anyway I can still get them removed from my TransUnion report?
Bills.com
May 09, 2011
Accurate derogatory entries on a credit report can remain on a credit report for 7½ years after the date of first delinquency. A bankruptcy can appear for 10 years. You have the right to dispute an inaccurate entry on your credit report.
Rebecca B.
Bolingbrook, IL  |  May 05, 2011
My husband and I filed a joint ch 7 BK in March 09 and were granted discharge in May 09. Most of my creditors are showing "late" from the time between filing and discharge on my credit reports. My husband's accounts are not showing the same, even within the same creditor. Is there anyway to remove my "lates" from my bureau?
Bills.com
May 05, 2011
The first thing to try is a dispute with the big-three consumer credit reporting agencies.
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Jeannie W.
Hamilton, OH  |  October 18, 2011
I had to file chapter 7 bankruptcy in 1994 after the death of my first husband; I hated it and it made me feel terrible; within a short time I rebuilt my credit; remarried, and five years after the bankruptcy bought a house; not much problem at all but then in 2003 after a terrible accident we tried to refinance and the bank official sitting behind his desk said, "I don't know how you got the house to begin with" which hurt of course; he then said, FLEET had reported that I was 22 times late out of the last 24 months. Here is where it gets good; I never had a fleet account of any kind and it drove me crazy but to be able to take advantage of the low interest rates at the time my husband had to refinance on his income alone while I was busy fighting with the credit agencies about this account named FLEET. I finally pulled out my old discharge papers from 9 years before at this point and finally figured this out; I just checked account numbers and finally found one that matched this stupid FLEET account that I never had and here it had been discharged in the Chapter Seven 9 years before but under a different bank so then I investigated and found that Fleet bought this bank and obviously they either were not told of discharged debts or FLEET still thought it would try to get the money; Experian and Transunion changed things right away when I sent the evidence but EQUIFAX would not; they refused. I sent a fax to FLEET and they did nothing until finally i called to speak to a supervisor at EQUIFAX and the girl that answered said she would call me back which of course she never did; finally, I received another copy of a credit report and all they did was replace that it was included in a bankruptcy. It was terrible and really made me realize what can happen; as if the bankruptcy was not hurtful enough and made me feel bad enough nine years earlier they had to get in there before the deadline of ten years and still make me feel terrible and have to fight them with every thing I had in me. So this is just a lesson for all of you; you will have to watch your credit report constantly or end up in the situation I did; the credit reporting agencies and the companies are terrible people and do not care if their careless mistake ruins anyone's life or not; we who have had to file bankruptcy know what it does to our own self esteem but they do not care; they act like everyone does it because they want to. Now, speed up to 2010; my husband's pay was cut big time at work and he was keeping secrets because he did not want me to know how bad we were in debt until finally he had to tell me so he filed bankruptcy but according to the means test we did keep our house and never wanted to include it anyway. I am on a survivorship deed now from the earlier think the credit agencies had done to me but we did not file against the bank and I would not file with him after what had happened to me so many years ago; now he received his free copies online and it has that fifth Third Bank was in the bankruptcy but then it shows never late; paying as agreed; well, I suppose so they automatically take our house with our escrow payment taken out of our account and it has been that way for 11 years so we have never been late on our house payment so now I am angry again because it is inaccurate; totally again. None of these people are decent; they are greedy, mean, not understanding and really just do not give a darn about anyone but them except they will take our taxpayer money to bail them out. Something needs to be done; I mean really done to these wrong things being reported and also to the credit agencies for reporting it; why should something a creditor says hold more water then what we say; they should have proof before it is even put on the records; I believe they should give the person warning about it perhaps being put on the credit report if you cannot show that it is wrong within a certain amount of time and I don't mean ten days either; it takes longer than that sometimes just to get the records you need to prove your case; that is what should be done. One more thing; on the bankruptcy from 94 I reaffirmed with several companies that I felt I could handle and still live and I paid them every penny but one of them later was involved in a class action lawsuit and of course I sent that little white card to the the lawyer and guess what that company had to pay everyone back that had reaffirmed with them because they lied to the person saying they would be able to use the credit card but no one was so that was one tiny victory for consumers but that is all. I am sorry it has taken so long to write this but I really wanted to let people know how bad all these people are and we, alone, as the little guy cannot all afford lawyers to fight these people alone and that is what they count on. that is our weakness; money or lack of
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Bills.com
May 12, 2010
The credit report mentioned three things: 1) Bankruptcy; 2) Charge off; 3) Public record. You said you have not filed for bankruptcy. What about a charge-off? Is there something else in the public record about you that would indicate you are a poor credit risk?
Sila .
May 12, 2010
Hello and thank you. I never had a bankruptcy and just recive letter forom chase becuase they don`t want to give me a credit card they have one reason is says credit report shows current/past bankrupcy, charge off, public record? what do you think I should do?
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