Free Consultation
The office is open as per the NYS Covid-19 guidelines. We are now doing both in-person and telephone consultations. Please call the office at 718-855-6840 to schedule a time to speak with one of our experienced bankruptcy attorneys.

Removing a Bankruptcy Filing From a Credit Report

It’s surprisingly common for people exiting New York bankruptcy to see their credit scores improve. This phenomenon is generally attributed to the fact that debtors have taken the responsible course of action with their debts, rather than letting them spiral into default. Alternatively, creditors may be interested in taking advantage of former debtors’ inability to discharge their debts again for a few years, depending on the chapter they used.

Despite the benefits of filing bankruptcy to one’s credit score, many debtors don’t want to see it on their credit reports. Unfortunately, there’s little they can do about it—at first. The Fair Credit Reporting Act (FCRA) allows credit reporting agencies to keep a bankruptcy filing on a credit report for no fewer than ten years, and it requires them to disclose the chapter debtors filed in provided they are informed of it. However, there are ways consumers can try to lift a bankruptcy filing from their credit reports.

(1)  Ask them. Seriously, sometimes the credit reporting agencies will remove a bankruptcy if they are asked to do so. They’re more likely to agree if it was a chapter 13 filing, and the bureau might agree after seven years rather than demanding the full ten.

(2)  Make them. This only works if there’s an inaccuracy on the credit report, such as a bankruptcy the consumer never filed or one that has been on the report for longer than ten years. Consumers can directly challenge the credit bureaus if they can show there is an error.

(3)  Notify them that the bankruptcy filing was withdrawn. Doing this won’t lift the bankruptcy from the report, but it will clarify it. The clock for the ten-year limit on the credit report begins when the bankruptcy case is filed, not when the case is closed. That means credit bureaus will include a bankruptcy filing even for debtors who do not receive a discharge. The FCRA, though, allows debtors to require the credit agencies to note that the filing was withdrawn. This can be beneficial for debtors whose debts may not have been dischargeable, for example, but who nevertheless began successfully paying down their debts outside of bankruptcy.

Although it’s a slightly separate topic, errors on credit reports can be corrected, and for New Yorkers, it’s now easier to do.

Credit scores are not the be-all-end-all of credit access, but they can be important. Fortunately, the FCRA gives consumers (and former bankruptcy debtors) some tools to ensure their creditworthiness is properly reported. For people who have significant debts, it’s helpful to hire an experienced New York bankruptcy lawyer to handle the matter. It’ll be better for a credit score than defaulting.

For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced business bankruptcy lawyer Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA

Recent Posts

Beware Grace Periods, Debtors

Too often, debtors see grace periods offered by lenders as free benefits. “Grace” makes it sound so innocent. However, debtors who routinely rely on grace periods when making payments will find themselves facing financial difficulties that might lead to bankruptcy. The reason is that although creditors offer grace periods to debtors, they also use them

Read More »

Bankruptcy May Not Rescue You From Vicious Personal Disputes

Bankruptcy is a technical process that assumes everyone working within it is mostly rational. To the extent that it expects parties to deviate from irrational behavior, the Bankruptcy Code and its accompanying rules include incentives to keep parties in line. Creditors are usually large and impersonal, and they rarely care if their debtors file bankruptcy.

Read More »

Non-Lawyers’ Explanations of Bankruptcy May Be Wrong

Do you have financial problems? Do you tend to ask your friends for advice? Is one of your friends an experienced New York bankruptcy lawyer who will explain the process for you? Are your friends otherwise knowledgeable people? The answer to these questions may be, “Yes but you don’t know it.” Although many bankruptcy lawyers

Read More »

6 Steps to Take Before Filing Bankruptcy

Leaving your case to an experienced New York bankruptcy lawyer is not the only step on the to-do list before filing bankruptcy. There are many things debtors should do (and not do) before they file, and the more organized and mindful debtors are, the easier the process will be and the more effective the result.

Read More »

Social Security Number Not Necessary for Bankruptcy

A question that’s commonly asked about New York bankruptcy is whether a debtor needs a Social Security number to file. Debtors ask because they sometimes run across the bankruptcy form title, “Your Statement About Your Social Security Numbers” (B 121), which asks debtors to list their current and prior Social Security numbers. The new bankruptcy

Read More »

How Can a Debtor (or Creditor) Get a New Trustee?

The trustee in a New York bankruptcy case is usually not the debtor’s ally. His or her purpose is mainly to administer the bankruptcy estate or ensure the debtor’s repayment plan goes according to plan. Trustees pursue preference payments, fraudulent conveyances, and other malfeasance committed by debtors. They frequently initiate adversary proceedings against debtors. In

Read More »
Scroll to Top