Most people who try repairing their credit after a bankruptcy already know the difference between Chapter 7 (no repayment plan and some debts can be eliminated) and Chapter 13 (court-ordered repayment plan to repay debts that can last 3-5 years). But repaying a debt, or even eliminating a debt cannot remove the negative item from your credit report, that can stay there for up to 10 years.
It’s sad, but many credit experts actually do not understand that negative items (such as late payments and charge offs) are actually reported to the credit bureaus by the creditors, and bankruptcies (and other negative items like judgments and liens) are simply reported through public records and can actually be disputed for being misleading, biased or unverifiable. There is no law that says the item *must* stay for 10 years. Anyone who tells you otherwise is misinformed, or lying to you. The law actually states that the item cannot be on the credit report longer than the period of time. But the items can be removed (and often are… see below) for a number of reasons.
How can you dispute a bankruptcy?
Under the Fair Credit Reporting Act, any negative item can be disputed for being inaccurate, misleading, unverifiable, biased, or even incomplete. Under any of these circumstances, a consumer can send the bureaus a letter asking them to investigate the negative item (including bankruptcies) and verify the information. If, after 30 days, the credit bureau’s investigation turns up incomplete information from the creditor, or public records, under federal law, the bureau must remove the item.
If you feel a bankruptcy is questionable and is on your report for the wrong reasons, you can dispute the bankruptcy directly with the credit bureaus by getting a credit monitoring service.