Important Facts to Know if you have a bankruptcy in your credit history:
1) It is legal to have the bankruptcy (BK) removed from your credit report prior to 7 years (Chapter 10) or prior to 10 years (Chapter 7). The law limits the maximum time it can stay on your credit report, not the minimum time.
2) If your bankruptcy does not show on your credit report and you are applying for a home loan, you MUST truthfully declare it on the mortgage application. Falsifying an application by checking the box for “no” rather than “yes” on the question, “Did you file bankruptcy in the last ten years?” is a FELONY CRIME.
3) The purpose of removing a bankruptcy early from a credit report is so your credit scores goes up; thus, enabling you to get a lower interest rate on all types of financing. It is never to lie on an application.
4) You can get a good FHA home loan just 24 months after a Chapter 7 BK is discharged. Two years is not too long to wait! It gives you time to re-establish good credit and save money for a 3.5% down payment.
5) You do not get a bankruptcy removed early by sending a “609 Letter” or other dispute letter. You must take steps prior to correct your personal identifiers and to get the individual accounts that say “included in bankruptcy” fixed/updated/removed. The complete step-by-step guide is here.
There is no shame in having declared BK. It is a legal tool that enables people who need a fresh start. No one should have thoughts about suicide or robbing a bank due to being overwhelmed with debt. That is what bankruptcy is for. Each state has its own laws, so speak with a local BK attorney if you need to explore that option.