How Long Does a Bankruptcy Stay on Your Credit Report
Updated on 29 November 2023
When your family is suffering from debt and financial struggles, it can feel like they will never end. The fear of losing your home, car, or job can be overwhelming. While many families view bankruptcy as a last resort to get relief from the crippling weight of their debts, it actually can be an excellent tool for repairing your credit score. At DebtStoppers, our qualified attorneys are committed to helping people just like you turn their financial situation around by filing.
Who Reports Bankruptcies to the Credit Bureaus?
When you file for bankruptcy, your case becomes part of the public record. Court petitions, schedules, and court documents are all considered to be public records. The court does not send any information directly to the reporting agencies. Rather, the bureaus themselves collect information about cases from each court’s public records.
All We Need To Know About Chapter 7 Bankruptcy and the Credit Report
The length of time that a bankruptcy stays on your credit report depends on which chapter you file for. Chapter 7 cases will remain on your report for 10 years from the filing date, whereas Chapter 13 bankruptcies stay on your report for seven years from the date you filed.
In addition, individual accounts that you discharge in Chapter 7 or Chapter 13 can remain on your credit report for seven years. If the account was already delinquent when it was included in your bankruptcy, the seven-year period will begin on the date the account fell behind for the last time. This means that while the bureaus will list a Chapter 7 for ten years, the accounts themselves can fall off much earlier.
Even though a bankruptcy remains on your record for so long, the positive effect of filing usually outweighs the initial blow. Most people who file have been struggling to pay their debts for some time, and many accounts are severely delinquent when their petition is filed. For this reason, many of our clients actually see their scores go up after they file and see a dramatic increase after their cases are discharged.
How To Get a Bankruptcy Off Early?
Unfortunately, you generally cannot clear a legitimate public record from your credit report without reason to challenge its accuracy. However, the Fair Credit Reporting Act allows you to challenge information on your record if it is incorrect, has been reported for a longer time than permitted, or cannot be verified by the creditor who reported it.
Bankruptcy records are no exception: you remove them from your report early by challenging any errors. It’s a good idea to work with an experienced attorney who knows what kinds of errors to look for and the best ways to challenge unsubstantiated records.
At DebtStoppers, we work with you after your bankruptcy case to make sure your credit report is being reported accurately. If there are any errors or mistakes, DebtStoppers will take quick action to fix these errors and pursue the creditors to compensate you for them.
A DebtStoppers lawyer near you can help manage the process from start to finish and help you rebuild your financial security. Our skilled legal professionals have helped thousands of people across the country get a fresh financial start. We can even help you secure an FHA mortgage in as little as one year. Call an office in your state today or contact us online to set up a free initial consultation to discuss your family’s financial needs.
Rebuilding Your Credit Score After Bankruptcy
Although bankruptcy affects your credit report for a considerable period, it's essential to start rebuilding your credit score as soon as possible. Adopting responsible financial habits, such as making timely payments on any remaining debts and using credit wisely, can help improve your credit score over time.
Securing New Credit
Obtaining new credit after bankruptcy may seem challenging, but it's not impossible. Consider applying for a secured credit card or a credit-builder loan to establish a positive payment history. These credit options typically have lower qualification requirements, making it easier for individuals with a bankruptcy on their credit report to get approved.
Monitor Your Credit Report
Regularly monitoring your credit report is crucial to ensure its accuracy and to identify any discrepancies. By keeping a close eye on your credit report, you can dispute any inaccuracies and ensure that your credit score accurately reflects your financial behavior. You're entitled to a free credit report from each of the three major credit bureaus annually, so make sure to take advantage of this opportunity.
Create a Budget and Stick to It
Establishing a realistic budget and adhering to it can help you manage your finances more effectively, preventing you from falling into debt again. A budget allows you to allocate your income towards your expenses and savings, ensuring you can cover your financial obligations while avoiding the need for additional debt.
Develop an Emergency Fund
Unexpected expenses can derail your financial progress, so it's essential to build an emergency fund. By saving a portion of your income in a separate account, you can cover unforeseen costs without resorting to credit or loans. This will help you maintain a healthy credit score and minimize the risk of falling back into debt.
Consult a Financial Advisor
Seeking the guidance of a financial advisor can be beneficial in navigating your post-bankruptcy financial life. A professional can provide valuable insights and strategies to manage your finances, improve your credit score, and achieve long-term financial stability.
By following these steps and maintaining responsible financial habits, you can rebuild your credit score and minimize the impact of bankruptcy on your credit report.