 Clearing
bankruptcy from credit record
|  Dear
Bankruptcy Adviser,
Relief was granted in March, 1997 on my Chapter
7 bankruptcy filing and my credit has been clean ever since. As I approach the
10th anniversary, what steps are necessary to clear this from my record? Should
I still declare past bankruptcy on applications?
-- Bill
 Dear
Bill,
Congratulations! That's great news. I know that many people who
read this column are wondering if there is light at the end of the tunnel, and
letters such as yours prove that there is life after bankruptcy.
It
is important, however, for you to become proactive in this process. The credit
reporting agencies have no obligation to remove information. You need to make
requests that legally require them to take action.
There are four steps to take.
 |
Steps to take | |
|
| • | Step
1: Pull your credit report. This will ensure that you are using the correct
account numbers. | | • |
Step 2: Make
copies. Photocopy your discharge notification, the list
of accounts from your original bankruptcy petition, your
driver's license, Social Security card and a piece of
mail (such as a bill from a utility) that verifies your
address. |
| • |
Step 3: Send
notifications. Send letters to all three agencies: Experian,
TransUnion and Equifax. Keep the letters short. State
that you filed 10 years ago and therefore all record of
the bankruptcy must be removed. Include the copies you
made in Step 2. Remember, never send original documentation.
It's the only real insurance you have. |
| • | Step
4: Wait patiently. Wait at least one month before taking any action that would
make someone look at your credit report. Once you've completed these steps, the
bureaus will update your credit report within 30 days. Then, you're free and clear.
| |
If you cannot find your original records, you can
go to the Public
Access to Court Electronic Records, or PACER, to find the information.
As far as applications go, you need to answer questions
truthfully -- but you do not need to include any extra information.
Some employers ask, "Have you ever filed bankruptcy before?"
You would need to answer truthfully and state, "Yes."
Make sure you list the date so the employer knows that it was 10
years ago. Other applications ask, "Have you filed bankruptcy
in the past seven years or the past 10 years?" For those applications,
you can truthfully answer, "No."
Regardless, make sure that if you must report a previous
bankruptcy that you have prepared a short, 30-word explanation as
to why you originally filed. You want to make the prospective employer
understand what caused your bankruptcy -- otherwise, the employer
may assume your bankruptcy was sourced in shady behavior. Most bankruptcies
are due to illness, divorce or loss of employment and there's nothing
wrong with saying that. Have a short explanation ready that reflects
the facts.
Remember,
Bill, even though you've made it to the other side, you must continue to restore
your credit. Establish and maintain new trade lines. Pay your balances. Check
your report annually. And keep up the good work. You're an inspiration to lots
of other people who are in seemingly impossible situations.
Justin Harelik is a practicing attorney in Los
Angeles. To ask a question of the Bankruptcy Adviser go to the "Ask
the Experts" page and select "bankruptcy" as
the topic.
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