If a bankruptcy is no longer reflected on your credit report, must you disclose it to a lender?

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If a bankruptcy is no longer reflected on your credit report, must you disclose it to a lender?

I am trying to obtain a mortgage and the loan application is asking if I have ever filed a bankruptcy. As 10 years have elapsed and it no longer is reflected on my credit report, may I answer this question in the negative or do I need to say yes? Also, I defaulted on a student loan 5 years ago but was then granted forbearance; I have been paying my student loan faithfully for the past 4 years. The credit report is still showing that I have an open default, however the loan has been taken over by another entity so how do I clear this from my credit report?

Asked on October 28, 2010 under Real Estate Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) You have to answer ALL questions on an application honestly. If it asks if you have EVER filed bankruptcy and you have, you need to answer in the affirmative. If you do not and it ever comes out that did in fact file, the lender might have grounds to rescind the loan (i.e. take it back; you'd have to repay it all at once) owing to false answer or fraud on the application.

2)  To try to clear the default from your record, you need to be able to provide good evidence that it has been paid. You should gather together any payment records, receipts, correspondence, agreements, etc. and put them together in a way that will make it clear that the default is no longer open.


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