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Who Reports Bankruptcies to the Credit Bureaus?
Who Reports Bankruptcies to the Credit Bureaus? How and why do bankruptcies show up on the credit report? Why is it that sometimes they do not show up?
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2 Replies
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Within the first 90 days of the bankruptcy the courts report this information to the bureaus. Most courts across the country do not have ongoing reporting after this timeframe.
If it is not reporting, if the credit report pulled was from a lender, they may not be pulling in public records. Most lenders do pull in public records, but I have seen this from time to time. It will be identified at a later point during the lending process, however.
The other option is that the bankruptcy has aged off of the credit report or has been disputed and successfully removed.
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Who Is Responsible for Reporting Bankruptcy to Credit Bureaus?
In most cases, the bankruptcy court forwards such information to the Credit Bureaus. Following the commencement of a bankruptcy case, the court informs credit bureaus like Equifax, Experian, and TransUnion of the bankruptcy’s status. Also, creditors who participated in the bankruptcy will more certainly report the debt discharge to the credit bureaus.
What is the Process and the Logic Which Dictates the Recording of Bankruptcies onto Credit Reports?
Filing Process:
Upon an individual’s application for bankruptcy, the court will enter considerations into a public record upon which the type of bankruptcy is based, for instance, chapter 7, chapter 11, or Chapter 13.
This information is available publicly and forms part of the debtor’s assets; thus, it would be reported to the Credit Bureau.
Impact on Credit Report:
Depending on the circumstances, definitions, and other factors, the general practice takes notes about bankruptcy based on standard filings that can be found in the public record for filing – specifically, a separate court case number:
- The type of bankruptcy filed.
- The date of filing.
- Court reference and docket number details.
Duration on Credit Report:
- Chapter 7 bankruptcy can remain in credit history for 10 years.
- On the other hand, Chapter 13 longevity is only counted for 7 years, starting from the date it was filed.
Why Do Bankruptcies Sometimes Go Unnoticed?
Timing and Delays:
- There is a time lag between the actual bankruptcy and when it is reflected on the credit report. For instance, it can take weeks after the court informs the credit agency for them to effect changes.
Errors or Omissions:
- Some bankruptcies may not appear due to reporting mistakes.
- The credit bureaus must receive relevant court documents promptly to get the bankruptcy placed on the credit report.
Disputes:
- If a borrower does not accept bankruptcy for whatever reason, credit reporting does not reflect that bankruptcy until the matter has been resolved.
Multiple Reports:
- Sometimes, one credit bureau report shows a bankruptcy, whereas another does not.
- This is likely due to variations in their record collection and record-keeping practices.
- The records of the bankruptcy court are official records of bankruptcies.
- Therefore, this may be a real blow to a borrower as it may result in a bankrupt status on their report and score.
- Some months after the filing date, debtors will probably start seeing the notation.
- Other people won’t see it for quite some time.
- Several variables, like issues with details and claims, can hinder this from appearing entirely or without delay.
- Understanding that mistakes make life easier for people, checking one’s credit report regularly is crucial.