Writing a Bankruptcy Explanation Letter
Posted In: Bad Credit
Question
I am trying to pre-qualify for a home mortgage loan, and I filed a chapter 7 bankruptcy back in 2001. The underwriter wants a letter to explain the bankruptcy, what is the best way to write it? Some say to write hardship due to job loss, but will this help or hurt my circumstance? What exactly are they looking for?
Response
It is best to be honest in your bankruptcy explanation letter, and thoroughly explain your situation at the time. Explain, in some detail, your hardships and even end the letter with a few brief ways in which your financial behavior has changed for the better since your bankruptcy.
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November 9th, 2009 at 9:43 am
We filed Chapter 13 in 2001, two credit reporting agencies have removed it from our credit report. What terminology do you use, when asking a reporting agency to remove the listing. I know they have the right to show it listed for 10 years, but they will remove it if you ask.
November 13th, 2009 at 2:08 pm
Hi Felicia, the letter is more for any lenders you may encounter when a bankruptcy is still showing on one of your credit reports. Good job on getting the bankruptcy removed from two credit reports. You may find this article helpful in getting it removed from the third: http://www.fightcredit.com/how-to-remove-a-judgement-from-credit-report/