Another great question from my email bag, this one regarding what to do if your bankruptcy is still showing up on your credit report long after it was supposed to have dropped off. Here’s what the she wrote:
“If you applied for ‘bankruptcy’ once before re: like I did 20+yrs ago and was completely discharged of the bankruptcy etc. then why does the bankruptcy still stay on your record? What is the point of the discharge and going through the whole process, having the bankruptcy show on your credit history for 7yrs etc. when it is never completely absolved from your personal credit history. I hope to find some loophole to get this removed from my history however I am running up against roadblocks and no one can give me a divinitive answer either way which is extremely annoying/frustrating!!”
I can tell you’re frustrated – I would be too! Because it’s only been 3 years since my bankruptcy was discharged, I have not yet had the pleasure of seeing it drop off my credit report. However, I have run into similar situations. When I first started doing routine checks of my Equifax Canada and TransUnion credit reports, I noticed there were some inaccuracies. But, after I submitted the appropriate request forms, they were all corrected.
Upon reviewing my most recent credit report, I noticed a collection item had actually dropped off my credit report a few months early, but hey, I’m not complaining about that! Doesn’t matter – I’m not planning on applying for any new credit this year anyways, and by the time I do apply for new credit, that account would have (or “should have”) fallen off my credit report. It just goes to show that there’s no guarantee that things will work the way they’re intended do.
Six or Seven Years – How Long Does A Bankruptcy Stay On A Canadian Credit Report?
Back to the bankruptcy showing up on a credit report. You may have heard some people say that a bankruptcy stays on your credit report for six years, while others say seven years. So which one is it? Well… both. While you are an undischarged bankrupt (usually 9 months for “first time” bankrupt Canadians who eligible for an automatic discharge), this fact will show up on your credit report.
Then, once you bankruptcy is discharged, it will show the date of of discharge for six years. Add those two time periods together, and you get six years and nine months. Almost seven years, which is what some people will round it up to. Others will be more specific and say that the bankruptcy remains on your credit report for six years. Only, they need to clarify this and say “six years from the date of discharge.”
On one of my Equifax Canada credit reports, I noticed this statement:
“A bankruptcy automatically purges six (6) years from the date of discharge in the case of a single bankruptcy. If the consumer declares several bankruptcies, the system will keep each bankruptcy for fourteen (14) years from the date of each discharge. All accounts included in a bankruptcy remain on file indicating “included in bankruptcy” and will purge six (6) years from the date of last activity.”
Old Information Should Drop Off In Time
So, in the case of a first (and hopefully LAST) bankruptcy, it “should” disappear 6 years from the date it was discharged. But, I’ve seen some of my old accounts (which were also supposed to automatically purge after 6 years from the date of last activity) show up for a few months more. However, between the passage of time and those requests for corrections, they all dropped off my credit report.
You MUST Submit A Copy Of Your Certificate of Discharge To The Credit Bureaus… Or Else!
In the case of a bankruptcy, it is highly recommended to forward a copy of your Certificate of Discharge to Equifax and TransUnion – the two credit bureaus in Canada. If you do not do this, your bankruptcy will still show on your credit reports, and probably as being undischarged!
If Your Bankruptcy Still Shows 20 Years Later…
If you filed for bankruptcy over 20 years ago, and it was your one and only bankruptcy (not a second or third bankruptcy), then it should be off your credit reports by now. If it’s not, I would highly recommend filling out a request form to get the error corrected immediately. For Equifax, you need to fill out the Consumer Credit Report Update Form or call the number listed on your most recent credit report. BE SURE TO INCLUDE A COPY OF YOUR CERTIFICATE OF DISCHARGE! If you don’t have it, contact the trustee who handled your bankruptcy for a copy or replacement. You should also call the other credit reporting agency, TransUnion Canada or contact them by regular mail regarding any discrepancies on your most recent credit report.
In my experience, it has been easier to deal with TransUnion. However, Equifax is the big player and the one most credit issuers and lenders consult. Some will check your credit reports with both of them. If you have any errors, you should immediately contact the appropriate credit bureau. In the case of old bills in dispute, you may need to obtain and submit proof that the account is paid in full.
If that old debt was included in your bankruptcy, or if your bankruptcy discharge date is not showing up, OR if it’s been more than six years since the date of discharge and your bankruptcy is still showing on your credit reports, you may need to include a copy of your bankruptcy filing papers showing all debts that were included as well as a certificate of discharge. If you do not have this, your trustee in Bankruptcy should be able to provide you with a replacement. But be forewarned that there will probably be a fee! My trustee told me that there’s a $100 fee for a replacement certificate. So, keep it somewhere safe, where you know you can find it. Or get it framed and hang it on your living room wall! (just kidding).
Maybe Your Bankruptcy Was Never Discharged?
Another possible scenario is that your bankruptcy was never discharged. If you never received a certificate of discharge, contact the Trustee in Bankruptcy who handled your case. Ask him or her if your bankruptcy was indeed discharged. If you find out your bankruptcy was not discharged, perhaps due to not complying with all of the requirement or it was opposed by a creditor, at least now you know why. so, get a replacement certificate (or see if they will give you a free photocopy of the one they have on file).
After Six Years From The Date Of Discharge, Start Checking!
If your bankruptcy was discharged, and it’s been more than six years since it was discharged, submit (or resubmit) your Certificate of Discharge. It may take them a few week to update your credit reports. I would allow at least a month, maybe more. Then request a new copy of your credit report and see if it’s still showing up. Better yet, when submitting your certificate of discharge, request that a new copy of your credit report be sent to you once all of the updates have been done. By mail, you should be able to get it for free. If you get it online, you get it instantly, but you have to pay for it (about $15 with TransUnion and $25 from Equifax, which also includes your genuine Fico Score).
If it’s only been slightly longer than six years since your bankruptcy was discharged, it may take a few more weeks or even months for it to drop off your credit report. But if you absolutely can’t wait (and who could blame you!) then call or send in a correction form to see if you can speed up the process.
Second or Subsequent Bankruptcies
If you have gone bankrupt two or more times in Canada (oops!), please take note that the bankruptcy will remain on your credit report for at 14 years. I heard (but don’t recall where) that the first bankruptcy can or will reappear on your credit report if you have a second or subsequent bankruptcy.
DISCLAIMER: Each credit bureau can make up its own rules, which are subject to change. If in doubt, please consult Equifax and TransUnion directly if in doubt.
Some interesting information from the Equifax Canada website:
Public records include information on tax liens, lawsuits, bankruptcies and judgments that relate to the consumer’s debt obligations. Most public record items are listed for seven years including successfully completed bankruptcies. A second bankruptcy can remain on your file indefinitely.
So that means a second bankruptcy could stay on your credit report FOREVER! Be careful and make sure you don’t have to file for bankruptcy more than once in your lifetime!
Between all of these possible scenarios, you should know why your bankruptcy is still showing up on your credit reports, and what to do if it should have been purged already. I look forward to my bankruptcy dropping off my credit reports. Less than three years to go. Yep, I’m throwing a party the day my bankruptcy drops off my credit reports!