HomeCredit & DebtHow Long Does a Bankruptcy Stay on Your Credit Report?

How Long Does a Bankruptcy Stay on Your Credit Report?

Bankruptcy is usually considered an option of last resort, as people’s debt burdens become so heavy, that the only way to climb out of the situation is to acknowledge that they will never be able to repay them. In the United States, the bankruptcy court allows you to choose between two types of filings, Chapter 7 or Chapter 13.

When it comes to your credit report, the damage is already done and the time it takes to have it removed from or fall off of your credit report depends on a few different factors. However, with the right tools and information, you can get your credit back on track and start to qualify for items such as home mortgages, business loans, and other financial instruments that were temporarily unattainable.

How Long Does a Chapter 7 Bankruptcy Stay on Your Credit Report?

Once you have filed for Chapter 7 bankruptcy, also known as a liquidation, all of your debts are dissolved or cleared as if you never had the financial obligations in the first place. Since the debts will no longer be deemed collectible, the lenders won’t have any claims to your money or assets.

Debt from this type of bankruptcy proceeding will stay on your credit reports for the next ten years ,since all of it was obtained before the filing was approved. This will make acquiring credit extremely difficult initially and require years of effort to rebuild a decent credit score.

However, in the rare instance that your debts were not reported ahead of the procedure then those delinquencies will be removed immediately.

How Long Does a Chapter 13 Bankruptcy Stay on Your Credit Report?

The Chapter 13 bankruptcy doesn’t completely discharge your debts, but rather allows you to retain some of your assets by rearranging your finances, to allow only a portion of your debts to be repaid. This will include an arrangement where all obligations must be paid within a time frame of three to five years.

Like the other type of filing, a Chapter 13 bankruptcy can impact your credit for many years to come. Any debts with a discharged status will remain on your credit history over the next seven years as opposed to ten.

It is also important to note that any debts included in the bankruptcy payment arrangement will be eliminated after the five year period is over.

How Long Can Bankruptcy Affect Your Credit Scores?

Bankruptcy in and of itself is one of the most serious marks that can impact a credit score rating regardless of the type of bankruptcy filed. For those who file a reorganization as in Chapter 13, that means enduring a scarlet letter on your credit report for a full decade. The lesser of the two is a discharge procedure that comes with a Chapter 7 but still carries a seven year credit penalty.

Can Bankruptcy Be Removed from Your Credit Report Early?

In certain situations a bankruptcy can be removed from your credit report earlier than the normal time frame. These involve the careful review of a credit specialist in most cases and must be handled in a dispute process.

If you find that your report contains incorrect information on any of the following, you may want to determine if your bankruptcy can be removed.

  • Correct name
  • Address information
  • Social security number
  • Date of birth
  • Amount of debts owed
  • Payment history
  • Other pertinent errors

Following the dispute process in its entirety can lead to a successful removal. However, the reporting institution has thirty days to confirm the veracity of the information reported before being required to do so.

How Does Bankruptcy Affect Your Credit?

Bankruptcy affects your credit report in a variety of ways including the ability to apply for new credit, qualifying for an apartment rental or mortgage, and obtaining a personal loan to name a few. The average credit score will realize a drop of between 130 and 200 points depending on the scoring bracket at the start of the proceedings.

How to Rebuild Your Credit After Bankruptcy

Although it may seem daunting at first, rebuilding your credit score after bankruptcy is possible. Many people have not only become eligible for credit again but attained scores that were higher than they initially possessed before the bankruptcy was filed.

By following these tips you can be on your way to reclaiming your credit and the lifestyle you deserve.

1. Review Credit Reports Often

Credit reports should be reviewed every quarter to ensure that information is updated properly. A free credit report can be obtained from all major credit bureaus each year by visiting AnnualCreditReport.com and creating an account.

2. Maintain a Low Debt to Credit Ratio

Debt to credit ratios are one of the top three factors when it comes to calculating a payment score. By keeping this number below 30%, over time you will be seen as less of a credit risk to lenders by showing that you can spend at a healthy rate.

3. Begin with a Secured Card

Initially obtaining credit after bankruptcy will be as difficult as someone who has no credit history at all. Utilizing a secured credit card will allow you to determine a comfortable spending limit while improving your chances of obtaining a secured card down the line.

4. Build a Positive Payment History

Payment history is one of the top measures that credit card companies use to determine if you are a good credit risk. By building a track record of positive payments, you will establish a pattern that deems you creditworthy over time.

5. Dispute Errors Often

According to the Credit Law Center , more than 79% of credit reports contain errors in some shape or fashion. Diligently scanning your report for errors will keep your information up to date and avoid getting rejected due to misreporting.


Bankruptcy can have long lasting effects on your credit and quality of life. By staying on top of your spending habits and following the proper steps, you can repair your credit file over time and build a positive history again.

Latest Articles