How long does bankruptcy stay on your credit report? 7-10 years

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  • A Chapter 13 bankruptcy can stay on your credit report for up to seven years, while a Chapter 7 bankruptcy can stay for up to 10 years.
  • Credit scores can drop by 100 points or more after adding bankruptcy to a credit report.
  • To rebuild your credit score after bankruptcy, you’ll want to continue making on-time payments to your non-bankruptcy accounts and consider getting a secured credit card.
  • Get Your Free Credit Score With Credit Karma »

If you are feeling overwhelmed by your debt, bankruptcy is a legal process that can help you find relief. Filing for bankruptcy could end a car foreclosure or repossession, protect your wages from garnishment, or prevent your utilities from being shut down.

But bankruptcy also has its share of drawbacks. First of all, managing bankruptcy will usually require the help of a lawyer, which can be costly. Second, your credit score will take a hit after bankruptcy. And damaged credit can make it harder to approve a line of credit in the future, especially credit with attractive rates and terms.

But the good news is that bankruptcy won’t hurt your credit rating forever. Eventually, bankruptcy will hit your credit report and have no future impact on your score. Here’s how long it takes for that to happen.

How Long Does Bankruptcy Stay On Your Credit Report?

Bankruptcy typically stays on your credit report for a minimum of seven years and a maximum of 10 years.

While there are many types of bankruptcy, two of the most common types are Chapter 7 and Chapter 13. With Chapter 7 bankruptcy, all eligible debts are discharged immediately. With Chapter 13 bankruptcy, you agree to a three to five year repayment plan to partially or fully pay off your debts.

  • A Chapter 13 bankruptcy can stay on your credit report for up to seven years.
  • A Chapter 7 bankruptcy can stay on your credit report for up to 10 years.

It is important to point out that each delinquent account included in bankruptcy will also remain on your credit report for up to seven years. But the seven-year clock for overdue accounts begins when they were first reported as overdue, do not when you filed for bankruptcy.

So if some of the accounts included in your bankruptcy were already past due before you filed, they will fall off your credit report before the bankruptcy. However, any accounts that were current until your filing will be removed from your report at the same time as the bankruptcy.

How Does Bankruptcy Affect Your Credit Score?

Unfortunately, bankruptcy is viewed as a seriously negative event by rating models such as FICO and VantageScore. As such, if bankruptcy is added to your credit report, it can have a serious negative impact on your credit score.

According to myFICO, a person with a score in the mid-600s or 700s could expect their score to drop 100 points or more, or even 200+. In addition, the greater the number of accounts included in your bankruptcy, the greater the impact is likely to be on your score.

Fortunately, the negative impact of bankruptcy on your credit report will diminish over time. So while bankruptcy will still show up on your credit report five years later, its impact on your score will be much less than it was the year you filed.

Can You Remove Bankruptcy From Your Credit Report?

Unfortunately, if a bankruptcy that appears on your credit report is legitimate and is accurately reported, it is highly unlikely that a creditor or a credit bureau will agree to remove it.

Credit repair companies also do not have special powers to achieve this. So don’t be fooled into paying an upfront fee to a company that says they can remove legitimate negative items from your reports.

However, you will want to check your credit report to make sure the correct accounts have been reported as being involved in bankruptcy. You’ll also want to make sure that any accounts that were part of the bankruptcy have a zero balance.

If any accounts that were not part of the bankruptcy are declared as included, you can dispute the errors to have them removed. Or if the included accounts still show an outstanding balance, you can dispute that as well.

How to rebuild your credit after bankruptcy?

Although your credit score will suffer after bankruptcy, there are steps you can take to start building a positive credit history again. First, if there are any credit accounts that weren’t included in your bankruptcy, make sure you continue to make payments on time each month.

Second, applying for a secured credit card can be one of your best options for rebuilding your score. Since these cards require a security deposit, which limits the risk of the issuer, it is easier to qualify for poor or damaged credit.

Payment history on secured cards is reported to credit bureaus just like regular credit cards. So, making consistent payments on time to a secure card can improve your score over time, which can open up more credit opportunities for you down the road.

Before applying for a secure card, make sure it reports the cardholder’s payment activity to the three major credit bureaus. And to see the biggest positive impact on your score, try to keep the credit usage rate on your secured card below 30%.

Final thoughts

Remember that bankruptcy is only one of the various debt relief options. Depending on your situation, you may want to explore other options first, such as taking out a debt consolidation loan or trying to work out a repayment plan with your creditor on your own or with the help of a credit counseling.

If you are looking for advice on the best way to manage your debt, you may want to consider making an appointment with a NFCC Certified Credit Advisor. In some cases, you may find that a different debt relief strategy would save you money while having less of a negative impact on your credit score.

But if you decide to file for bankruptcy (or have already done so), be aware that the damage to your credit score will be temporary. Ultimately, the greatest cure for your bankruptcy-related credit problems will be time. If you are patient and commit to good credit habits, your credit score will increase slowly but surely.

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