How Long a Bankruptcy Stays on Your Credit Report
- Chapter 7 bankruptcy
- Chapter 13 bankruptcy
- Other types of bankruptcy
How long does a bankruptcy stay on your credit report? It depends on the type of bankruptcy, but it can stay on your report for up to 10 years.
Checkout this video:
Chapter 7 bankruptcy
How long it takes for Chapter 7 bankruptcy to fall off your credit report
Chapter 7 bankruptcy stays on your credit report for 10 years. That might seem like a long time, but it’s actually not as bad as it could be. Certain other types of bankruptcies can stay on your credit report for up to 20 years! And even after Chapter 7 bankruptcy falls off your credit report, creditors will still be able to see that you filed for bankruptcy if they pull your complete credit history.
The effect of Chapter 7 bankruptcy on your credit score
Chapter 7 bankruptcy remains on your credit report for up to 10 years from the date you file. This negative mark will weigh down your credit score and make it difficult for you to qualify for new credit during that time.
Chapter 13 bankruptcy
How long it takes for Chapter 13 bankruptcy to fall off your credit report
Chapter 13 bankruptcy remains on your credit report for seven years from the date you file, unless you take steps to have it removed sooner. You can improve your credit score during that time by making all your required payments on time and keeping your other debts in good standing.
After you complete your Chapter 13 repayment plan, most creditors will report the debt as “discharged in bankruptcy.” This designation indicates that you no longer owe the debt and makes it less likely that you will be able to obtain new credit. However, the fact that you filed for Chapter 13 bankruptcy will remain on your credit report for up to 10 years.
The effect of Chapter 13 bankruptcy on your credit score
Bankruptcy generally stays on your credit report for seven to ten years. However, if you file for Chapter 13 bankruptcy, it will only stay on your report for seven years. This is because Chapter 13 bankruptcy provides a repayment plan for your debts, and creditors view this as a sign that you are committed to repaying your debts.
Other types of bankruptcy
How long it takes for other types of bankruptcy to fall off your credit report
Chapter 7 bankruptcy, also known as a liquidation bankruptcy, involves the sale of your assets to repay creditors. Most types of debt are discharged, or eliminated, but you may have to give up some of your property, such as a second car or vacation home. Chapter 7 usually takes about three to six months to complete and is the most common type of bankruptcy filed in the United States.
Chapter 13 bankruptcy, also called a reorganization bankruptcy, consolidates your debts into a three- to five- year repayment plan. You must use your disposable income to make payments to a trustee who then distributes the money to your creditors. While you are making payments under the plan, you are protected from collection efforts by creditors. After you have made all of the required payments, any dischargeable debts will be eliminated.
Both types of bankruptcy will stay on your credit report for seven to 10 years, but Chapter 13 bankruptcies are reported differently than Chapter 7 bankruptcies. On your credit report, a Chapter 13 bankruptcy will be listed as “reorganization” and will not have as much negative impact on your credit score as a Chapter 7 bankruptcy.
The effect of other types of bankruptcy on your credit score
There are different types of bankruptcy, but the two most common are Chapter 7 and Chapter 13. Chapter 7 bankruptcy is known as liquidation bankruptcy. In a Chapter 7, the court may sell some of your assets to repay creditors. This type of bankruptcy also is called a straight bankruptcy or a liquidation proceeding.
Chapter 13 bankruptcies are reorganization bankruptcies. In a Chapter 13, you make payments to a trustee for three to five years, and at the end of that time, any remaining debt is discharged. This type of bankruptcy is also called a wage earner’s plan.
Other types of bankruptcy include:
-Chapter 9: This type of bankruptcy is for municipalities, such as cities or counties.
-Chapter 11: This type of bankruptcy usually is filed by businesses but also may be filed by individuals with large amounts of debt.
-Chapter 12: This type of bankruptcy is for family farmers and fishermen.