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Topics addressed on May 17, 2006:
Multiple bankruptcies cannot be deleted early
My question deals with my Chapter 7 bankruptcy, filed August 1996, and my Chapter 13 bankruptcy, filed October 1999. Both are scheduled to continue on my record until August and October of this year, respectively. Is there any way to ask for removal of these bankruptcies as early as today? I am trying to apply for a personal loan.
Chapter seven bankruptcies are deleted 10 years from the filing date, and chapter 13 bankruptcies are deleted seven years from the filing date, which is why both will be deleted this year. The bankruptcies will be deleted automatically. Accurate information cannot be deleted early.
I am concerned that you have declared bankruptcy twice and now want that information deleted from your credit history early so that you can take on more debt. It is the kind of statement I often hear from people with a pattern of poor credit management.
I encourage anyone in your situation or a similar one to seek financial counseling that includes credit management and budget training. Changes to federal bankruptcy law now require credit counseling as part of the process hoping to break the pattern of poor financial management.
You may already have received counseling, given careful thought to why you need to apply for a personal loan and prepared a budget plan to repay the debt. If so, you are headed in the right direction.
Many people who write to me seem to believe that they can use credit to get everything they want, when they want it. Those are the people that are at risk for high stress or bankruptcy.
Before applying for a loan you should have a good reason for doing so. The first step is to consider delaying a large purchase and saving the money for it so that you can avoid the debt. If after giving the purchase serious thought you determine a loan is the right course, you should establish a plan to repay the debt. That plan should include a budget that incorporates the loan payments.
Anytime you decide to buy something with credit, please make a decision about what purchases you might have to give up, or at least delay, so that you don’t get into debt trouble again.
As you have likely discovered, the presence of two bankruptcies in your credit history make it difficult to get approved. If it is possible, it would be better to wait a few months until the bankruptcies have been deleted before seeking new credit.
Thanks for asking.
- The "Ask Experian" team