After a bankruptcy filing or discharge, credit reports should be updated by the creditors and credit reporting agencies to reflect that debts have been discharged. Under the Fair Credit Reporting Act – sometimes referred to as the “FCRA” – creditors and credit reporting agencies are required to report accurate and complete information.
How Long on My Credit Report ?
In general, the filing of a bankruptcy case may be reported on a credit report for up to 10 years from the date the case is filed. The websites of Experian and TransUnion state that they only report completed or discharged chapter 13 bankruptcy on credit reports for only 7 years. Credit reporting agencies should remove the reference to bankruptcy automatically after such 7 to 10 year period. The filing of bankruptcy is often reported in the “public records” section of a credit report.
Individual accounts included in a bankruptcy case can remain on a credit report for the usual seven year period from its original delinquency date or other adverse information. Experian.com states that the filing of the bankruptcy case should not change the original delinquency date or extend the time the account remains on the credit report.
How is Discharged Debt Reported ?
Accounts included in the bankruptcy should accurately indicate that they were discharged in the bankruptcy case. The most accurate report would be “0 balance”, “included in bankruptcy”, or “discharged in bankruptcy”. Most suggest that notations such as “past due” or “charged off” should be deleted.
Correcting Your Credit Report
If your credit report does not accurately report the bankruptcy discharge information, you can request that this information be updated. You can obtain a free copy of your credit report once every 12 months at www.annualcreditreport.com.
The Federal Trade Commission’s website provide helpful educational publications about credit reports. The Bankruptcy Court of the Western District of Washington also provides useful information about “Bankruptcy & Your Credit Report.”
Mortgages After Bankruptcy
Federal Housing Administration (FHA) mortgage loans are offered by individual lenders and insured by the FHA. It is generally possible to qualify for an FHA mortgage loan after a period of time after the filing of a Chapter 13 or Chapter 7 bankruptcy.
The FHA rules allow a mortgage lender to consider approving a FHA mortgage loan after 1 year of timely payments under a Chapter 13 plan.
The FHA generally will consider a mortgage 2 years after a Chapter 7 discharge. The borrower must also qualify financially, establish a good credit history after the Chapter 7 case, and meet other FHA requirements.
Fannie Mae will generally not buy mortgages until 2 years after a Chapter 13 case is over or until 4 years after a Chapter 7 case.