Chapter 7 bankruptcyCan a bankruptcy be removed from your credit report?
The credit bureaus have active campaigns online to make you think that it’s not possible. They pretend to be helpful, but they have ulterior motives. They don’t say it outright, but the way they word their interpretation of the FCRA makes people think that it can’t be done. The worst thing about that is that a lot of the top credit sites parrot the information which makes for a lot of misinformation online. However, as you will see below, bankruptcies absolutely can be removed from your credit report.
Removing a bankruptcy requires filing separate disputes with all three credit bureaus. Because of the way the credit bureaus work, you have to word your disputes carefully to avoid having your dispute deemed “frivolous”. While the FCRA offers protections for consumers, credit bureaus have the right to ignore anyone that they feel is abusing the law. Credit repair companies are experts at disputing negative items on your credit reports. They specialize in getting bankruptcies deleted from your credit report. They can also removed the accounts “included in bankruptcy” like charge offs and collections. Read my story below to see how I got my bankruptcy deleted.
Can credit repair help you in Washington to achieve financial stability? The automatic stay stops most collection efforts during your bankruptcy. But the stay is not absolute – creditors can ask the bankruptcy court to remove the stay, called lifting the automatic stay. If successful, the creditor can continue its collection efforts against you.
Read on to learn how creditors can lift the stay, when they might ask the court to lift the stay, and more.
What Is the Automatic Stay?
The automatic stay prohibits creditors from collecting from you while your bankruptcy case is proceeding. It takes effect immediately upon filing the bankruptcy case (that’s why it’s called automatic), and it stops (stays) collection action on pre-bankruptcy debts. The intent is to give you a breathing spell from creditor harassment while you develop a plan to reorganize your finances.
The automatic stay is both broad and powerful. Since it only has a few narrow exceptions, creditors must tread very carefully during a bankruptcy case or risk violating the court’s injunction.
(To learn more about the automatic stay, see the articles in our Bankruptcy’s Automatic Stay area.)
Asking the Court to Remove the Stay: Motions to Lift the Stay
If a creditor wants to continue to collect from the debtor during the bankruptcy, it can seek permission directly from the court to do so, known as “lifting” or getting “relief from” the automatic stay. The creditor must do this by filing a “motion” with the court.
Motions to lift the stay are not as common as one would think. When a creditor files a motion to lift the automatic stay, the debtor is entitled to notice and a hearing. The burden is on the creditor to convince the bankruptcy court that there is a very good reason to lift the stay, and the court is predisposed to continue the bankruptcy protection. For instance, the court will not lift the stay when an unsecured debt will be included in the debtor’s discharge.
When a Court Might Lift the Automatic Stay
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