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How Long Does Bankruptcy Stay on Your Credit?

Bankruptcy is available for debtors who have more debt than they can handle. Even though it can cause a credit score to dip, appearing on a debtor’s credit report for years, it should not hurt a person’s credit forever. If they play their cards right, it will be temporary.

Bankruptcy offers debt relief for individuals, married couples, and businesses. It can stay on a person’s credit report for up to 10 years, showing up for years after the bankruptcy discharge. But exactly how long it’s reported on your credit depends on whether you file a Chapter 7 or Chapter 13 bankruptcy.

  • If you file a Chapter 7 bankruptcy, it will stay on your credit for 10 years from the date of filing.
  • If you file a Chapter 13 bankruptcy, it will stay on your credit for 7 years from the date of filing.

If you file a Chapter 7, it will stay on your credit for a full decade, but that sounds scarier than it is. The effect of a bankruptcy starts to diminish within the first year of filing and it continues to diminish with each passing year. And, there is a lot you can do to soften the impact of a bankruptcy filing.

If you’re considering filing for bankruptcy, here are some tips on what you can do to minimize the effects on your credit report and start rebuilding your credit in the process. But before we begin, remember this:

  • If you file Chapter 7 bankruptcy, the discharged debts should be listed as “discharged” or “included in bankruptcy.” These accounts should all fall off within 7 years of the date you filed bankruptcy, sometimes sooner.
  • If you file Chapter 13, the accounts paid through the repayment plan and the bankruptcy itself should fall off your credit within 7 years of the filing date.

Follow These Credit Tips After Bankruptcy

To soften the impact of a bankruptcy, follow this advice:

  • Check your credit report. If a debt that was included in the bankruptcy is not listed as such, notify the three credit bureaus of the error. Likewise, if debts not included in the bankruptcy are reported as “discharged” or “included in bankruptcy” get those errors fixed as well.
  • After your bankruptcy, start rebuilding your credit immediately with a secured credit card, and pay off the balance in full each month. This will help you improve your credit score over time.
  • Always pay all of your bills on time.
  • Once the 7 or 10-year clock runs out, run your credit report and make sure the bankruptcy is no longer being reported. Bankruptcy should be removed from your report automatically, but if it isn’t, notify the credit bureaus.

Related: How Often Can I File Bankruptcy?

Bottom line: While bankruptcy can hurt your credit initially, it may be the best decision that you can make for your financial health and well-being. But the only way to ensure a fresh start, it’s important to follow up a bankruptcy with responsible credit use so you can rebuild your credit before the bankruptcy falls off your report.

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