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Debtors can move to remove bankruptcy before 10 years

The Fair Credit Reporting Act allows credit agencies to list bankruptcies of any kind for up to 10 years. However, the major credit agencies only list a Chapter 13 case for seven years. Florida consumers who are concerned about the impact of a bankruptcy on their credit report should know that its impact fades over time. This can be done by paying bills in a timely manner and not obtaining new debt.

In a Chapter 7 bankruptcy case, a debtor has his or her non-exempt property sold with funds used to pay off existing debts. If a balance remains after liquidating property, that debt is generally discharged. In a Chapter 13 case, a person uses regular income to repay debts over a period of three or five years. Regardless of what type of bankruptcy an individual files for, there are ways to remove it early.

For instance, it could be possible to ask for a written statement clarifying that a judge never verified the bankruptcy. Debtors could also ask the credit bureaus to remove any other inaccurate information related to a bankruptcy entry on their credit reports. If successful, eliminating these entries could help a person improve a credit score in a relatively short period of time.

Filing for bankruptcy may help a person overcome financial challenges related to paying medical or other debts. Taking this step may also make it easier to retain property such as a car or home while working to reorganize debt. An attorney may help a debtor learn more about what type of bankruptcy may be best based on that person's income and assets. Attorneys can also talk more about automatic stays that generally prevent creditors from taking collection action while a case is open.

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