What is Bankruptcy?

• Bankruptcy is a legal process that allows a consumer to petition the federal courts to erase or reduce debt. The bankruptcy court assigns a trustee to your case who will review your petition for accuracy. If creditors do not object to the bankruptcy petition and the trustee does not find any issues preventing the bankruptcy, a judge will sign the order granting the bankruptcy.
  
  

The Credit Report

• Any account that was showing on your credit report and was included in the bankruptcy may be updated to reflect the account was discharged in bankruptcy. Each creditor is notified of the bankruptcy. The creditor then will determine if he is going to take the time and effort to update the account. For accounts that are older and have already been removed from the credit report, the account will not show back up on the credit report. Additionally, the bankruptcy court will send a notification to the three credit bureaus. The bankruptcy is then noted in the public records portion of your credit report.
  
  

Can I Remove the Bankruptcy?

• Each account on your credit report may be reported to show it was included in the bankruptcy. To remove the bankruptcy means you would have to remove every single account, as well as the bankruptcy reporting in the public records portion of the credit report. Most accounts will not be removed or updated unless the account is reporting inaccurate information. For each account that has incorrect information, you can dispute the account with the credit agency. The credit agency then asks the creditor to correct the information, if necessary. If the creditor fails to respond to the credit agency, the credit agency must remove the entire account. Still, it's nearly impossible to remove all traces of a bankruptcy until the time limit for the bankruptcy to be reporting on your credit report has passed.
  
  

How Long Will the Bankruptcy Show?

• A bankruptcy remains on your credit report between seven to 10 years. While your bankruptcy will show on your credit report, it does not mean you will be unable to obtain new credit. Creditors realize people face difficult times. The creditors will pay close attention to how you have handled your credit after the bankruptcy. With each year that passed with good credit habits, your credit score will rise and you will look more attractive to potential lenders.