Bankruptcy Be Gone: Navigating the Removal from Public Records

In our role as financial educators, we focus on assisting individuals to clear negative marks from their credit reports, a crucial task during challenging economic times. One of the more complex issues is the removal of public records, like bankruptcies, from credit files. Public records, which are distinct from other negative credit entries, include court-related matters such as civil judgments, tax liens, foreclosures, and bankruptcies. They are openly accessible and can significantly impact one’s credit score.

The acquisition of this information by credit bureaus, often from sources like Pacer and LexisNexis, raises questions about the fairness of such practices. If these records aren't directly reported to individual credit files, why do bureaus collect them independently? This issue, we believe, is a matter of concern.

The key problem lies in the misreporting of data sources by credit bureaus. Often, they incorrectly list entities like the Recorder of Deeds or court clerks as the furnishers of information. This misattribution is a direct violation of the Fair Credit Reporting Act and presents a solid ground for challenging the inclusion of public records in credit reports.

Steps to Dispute and Remove a Bankruptcy from a Credit Report:

1. Initiate a Dispute with Credit Bureaus: Use a dispute wizard or a letter finder feature in your credit management tool. For those without such a tool, there are online platforms offering free trials to facilitate this process.
2. Follow-up with the Court Clerk: If the credit bureaus verify the bankruptcy record, draft a simple inquiry to the clerk of the court where the record was filed. Request them to clarify their procedure for verifying records with credit bureaus. Include a prepaid, self-addressed stamped envelope for their convenience.
3. Respond to the Clerk’s Feedback: Typically, the clerk will indicate that they do not report to credit bureaus. Forward this response to the credit bureaus, highlighting the discrepancy in their verification process. This challenges the legitimacy of their verification and compels them to comply with the FCRA.

In cases where the credit bureaus do not remove the record, consider filing a complaint with the Consumer Financial Protection Bureau. Additionally, compare the records in Pacer and LexisNexis for inconsistencies, which can further strengthen your dispute with LexisNexis.

Persistence is key in these matters. Keep expanding your knowledge and advocate tirelessly for your clients. This approach not only helps in credit repair but also underscores the importance of accurate and fair reporting in the credit industry.