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How to remove a bankruptcy from your credit report...

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December 12, 2007 03:44 AM

I was given a bit of advice from a friend who had a bankruptcy removed from his credit report on his own without paying anyone a dime. The idea is very simple. He found out that after a certain number of years, the county moves it's records from a paper file to microfiche. (In his case, it was 3 years.) He waited until 3 years had passed and then sent a dispute letter to all 3 credit bureaus. He didn't dispute that he had a bankruptcy, he just said it was a chapter 7 instead of a 13 (or vice-versa, I can't remember). At this point the credit bureaus had to start an investigation. When the courthouse got the validation request, they didn't bother going through the microfiche. If it had been on paper they would. Or so the story goes. So when they never responded to the validation request, it was deleted entirely from all 3 credit bureaus.

I'm not sure if this would work in every state or every county, but it worked for him. It might be worth a few bucks in postage to give it a shot if you are in such a situation. Anyone know of anyone else that did anything similar??

Tony D. Howell
Mortgage Consultant
Olympic Mortgage Consultants, Inc
910-264-7802
www.TonyDHowell.com

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Pam Graham

All Real Estate Options - Jacksonville, FL

Jacksonville, Clay & St Johns Counties

So did they have the wrong bankruptcy to start with?

Dec 12, 2007 03:52 AM

Courtney Cooper

Cooper Jacobs - Seattle, WA

206-850-8841

I always wonder abou tthose "investigations" the credit companies do...but kind of fishy on their part...

Dec 12, 2007 04:07 AM

Mike Russell

Mike Russell Real Estate Group - Overland Park, KS

Overland Park Kansas Real Estate

Sounds like it is up to luck at best.

Dec 12, 2007 04:14 AM

Cindy Jones

Integrity Real Estate Group - Woodbridge, VA

Pentagon, Fort Belvoir & Quantico Real Estate News

I've had clients a year out of bankruptcy purchase a car. Then after they have made about 6 months worth of on time payments on the car they have applied for a home loan with no problems. Now with the new credit and loan requirements that may not be possible but certainly a bankruptcy isn't as bad as it used to be.

Dec 12, 2007 04:48 AM

Tony D. Howell

The best place EVER! - Wilmington, NC

Pat - no it was accurate, he lied. But it worked...lol

Cindy - true, I think the finance companies for cars can finance anybody with a SS# regardless of income or ability to repay. And we used to could finance people for a home one day out of bankruptcy. That is not the case any longer. We all know how tight the mortgage guidelines have become and its pretty much 2 years out of a bankruptcy to get a home loan. But if you could "somehow" make it go away...then anything is possible!

Dec 12, 2007 07:15 AM

Eleanor Thorne

Equity Resources - Cary, NC

Advantage Lending 919-649-5058

How would you know how your county keeps records and when their time limit is up??? Maybe he had an inside source.......

Dec 12, 2007 08:49 AM

Eleanor - good question...I'm not sure how he knew, but my assumption is that he did have some inside information. That's why I'm wondering if anyone else has had a similar experience.

Obviously Nash County, NC doesn't work this way...at least not for judgements. I have a friend's credit report with a judgement on it. 2 bureaus report the amount as $3,400, the other says its $2,400. Obviously something is wrong. I disputed all 3 bureaus for him saying simply that their balance amount is inaccurate. All three came back as "verfied" with no changes made. He knows the true amount is $3,400, so there isn't really anything else to do, but isn't that a bit strange???

Dec 12, 2007 09:28 AM

Charlotte Home Loans Your Charlotte Mortgage Lender

Charlotte, NC

Great idea! To work the system you need to know how that system works! Good to know.

Dec 12, 2007 09:44 AM

Arina Hanciulescu

RealtyPros - Las Vegas, NV

RealtyPros

Thank you for the information. It's good to know that sometimes we can beat the system.

Dec 13, 2007 12:05 PM

Scott Wall

StoneHouse Realty, Inc - Bristow, VA

I should talk to my sisters-in-law. It seems that every other year they are declaring bankruptcy. Yet they are buying cars, getting credit cards, and still living large. I guess it pays to be "bad."

Dec 13, 2007 01:26 PM

Tracy Santrock

Santrock Realty Group Inc. , - Cary, NC

Raleigh - Cary Broker

Very interesting approach. I would say this works in some situations and not all but it's at least worth a try.

Dec 13, 2007 01:29 PM

Aaron Gallagher

Green Street Realty - Champaign, IL

It is a crime to lie on a residential mortgage loan application. On page 3 of the 1003 there are a series of questions one of them being, "Have you been declared bankrupt in the past 7 years?" Just something to keep in mind seeing as how the mortgage industry is under the watchfull eye of everyone these days!!

Dec 13, 2007 01:58 PM

yep - there's more legislation coming to make you a little wheezy about liars and cheaters.

Dec 13, 2007 09:48 PM

Aaron, it is absolutley a crime to lie on a mortgage application. I think that could be classified as "mortgage fraud". I'm not advocating that anyone lie to me on an application, but what they do outside of a loan is up to them. LOL

Dec 14, 2007 09:10 AM

Charles Dismuke

Amerifund Lending Group - Palm Springs, CA

Palm Springs Mortgage Guy

Tony,

I believe even if they put that they had a BK on their application. The lender would be more worried about what showed up on the credit report. If it didnt show on the credit report the underwriter would more than likely ask the the box be checked "no" to the BK question. The lender would be thinking of how they would sell the loan too.

Dec 14, 2007 10:41 AM

y y

/LSONHC';/.c - Denver, CO

not necessarily, Charles. There is a bankruptcy hotline that you can call and search by name, social security or case number. If the applicant says they filed a BK , the U/W would require verification of the borrowers statements. If there is a conflict of data, it would be in the lender's best interest to deny the loan until it was cleared up.

Dec 14, 2007 12:12 PM

Jim & Karen Frey

PaintLawn.com 805-669-8480 - Redondo Beach, CA

Lawn Painting

That was a great idea he had! It's a big game that you have to play to get what you need. Over the years I've heard many people quoting bankruptcy rules...i.e. "It automatically comes off you report in ____ years." I had a client with a bankruptcy 9 years old and all 3 bureaus were still listing it. They paid a credit cleaner and he got it removed, except for Experian (the tough guys) who insist they won't remove it until year ten! Like Grandpop said, "Use the tools available to you and make the job easier."

Dec 14, 2007 05:00 PM

Experian is the toughest of all the bureaus. To this day I'm still showing a 30 day late on my credit report with them. I promise you, its NOT accurate. I even have a letter from Wells Fargo stating that there is no such late payment and sent it to all 3 bureaus. It came off the other 2 in an instant, but not Experian. I've sent it 4 times and still no luck. Fortunately, it's showing a date of 6 1/2 years ago, so it'll go away on its own soon enough. (Or at least I hope!) And yes, I know I could sue Experian for the error, but really, is it worth it, when I haven't even been denied credit because of it??

Dec 17, 2007 10:35 AM

How to remove a bankruptcy from your credit report...

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