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Russell G. Small and Kenneth Lenz

How long does a bankruptcy stay on your credit?

| Nov 17, 2020 | Bankruptcy

People who file for bankruptcy usually take this step because they need to take control of their financial situation. One of the questions that often comes up when a person is considering bankruptcy is how long the filing will likely remain on their credit report. 

Here’s what you need to consider.

What type of bankruptcy are you filing?

If you file a Chapter 7 bankruptcy, the record of it will be removed from your credit report 10 years after the filing date. If you file a Chapter 13 bankruptcy, the filing is removed 7 years after the filing date. This occurs automatically, so you don’t have to do anything to make this happen. 

Having a bankruptcy on your credit report won’t necessarily stop you from obtaining new credit for years, however. Within a year or two after your bankruptcy, some lenders may even view you as a reasonable risk, knowing that you aren’t likely to be in the same financial shape you were before.

When do delinquent accounts disappear from a credit report?

Some people are concerned about when the delinquent accounts will be removed from the credit report. Delinquent accounts are removed from your credit report 7 years after the first report of delinquency. This means that most, if not all, the delinquent accounts will be off your credit report before the bankruptcy itself falls off the credit report. That will ultimately help your credit improve faster.

If you’re concerned about what the bankruptcy process will entail, you should discuss your specific case with an attorney. That’s the best way to fully understand what bankruptcy can mean for your future. 

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