The Fair Credit Reporting Act was created in 1970 to develop universal standards for the reporting of credit debts by credit bureaus. Bankruptcy is one of the many kinds of debts reported by the credit bureaus and the act details how long it can be on your credit report and other restrictions.
Length of Time
Most discharged debts on your credit report are removed after five years as a way to keep your credit report up to date and to focus on your recent and current debt. Bankruptcies deviate from this rule and will stay on your credit report for 10 years before finally being removed. Anyone viewing your credit report will see the bankruptcy and it will have an affect on your credit score.
Filing and Dismissal
The Fair Credit Reporting Act stipulates that if you file for bankruptcy and then seek a dismissal, the credit bureau has the right to note on your report that you filed for bankruptcy. They are also required to note the dismissal as well. The filing may cause a dip in your credit score, but the dismissal should offset it in the eyes of most creditors.
Balances
When you declare bankruptcy, the balance of most debts goes to zero. While the credit bureaus can report your bankruptcy, they must also report that all of the debt associated with the bankruptcy is reduced to zero. If the bureaus do not make the changes, then you have the right to dispute those debts and force them to make the change.
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