How long does bankruptcy stay on my credit report?

This is a common question that we are asked by our prospective clients. If you file Chapter 7 bankruptcy then the credit bureaus can report your bankruptcy filing for 10 years and if you file Chapter 13 bankruptcy then the credit bureaus can report for 7 years. While it is important to know all details if you are going to be filing for bankruptcy protection, the question most of my clients are trying to get at is whether they will be able to obtain credit in the future. The answer is yes.

Bankruptcy may show up your credit report for several years but it doesn’t prohibit you from rebuilding your credit. Oftentimes, a debtor is able to start rebuilding his or her credit as soon as 6 months after filing Chapter 7 bankruptcy. A Chapter 13 repayment plan takes 3 to 5 years to complete which poses difficulties in rebuilding credit so quickly after filing. For many Chapter 7 clients, it only takes a few years to have an above average credit score and the ability to finance vehicles and a home.

If you are overwhelmed by debt, managing that debt should be priority number 1. Your great credit score will only allow you to finance additional debt if your debt-to-income ratio is seen as favorable by the potential lender. Chances are you may not be eligible for the loan anyways. Bankruptcy offers options to manage the debt that is holding you back. Maybe you won’t need a loan in the near future when you have the other debts eliminated. Our office specializes in helping people through the bankruptcy process. Give us a call for a free appointment where we can answer your questions!