How Long Does Bankruptcy Stay on Your Credit Report? – Chapter 7 vs. Chapter 13

How Long Does Bankruptcy Stay on Your Credit Report? – Chapter 7 vs. Chapter 13

Bankruptcy is nowhere near as scary or mysterious as it may seem; in fact, nearly one million Americans file for it every year. Some of the entrenched myths about credit scores need to be debunked.

In this article, our bankruptcy lawyers in Houston provide you with the cold hard facts on bankruptcy’s effects on credit scores and reports.

What Is Your Credit Score after Bankruptcy?

Bad news first: filing for bankruptcy can put a crater-sized dent in your credit score, causing it to plummet more than 200 points. But while this is happening, you are working on having debts you would never be able to pay off discharged, and/or reorganizing your ability to pay back those debts.

Soon, you will be either free of debts (Chapter 7) or making positive payments on those debts (Chapter 13), and your score will begin to rise. The relative impacts of filing for bankruptcy on your credit score are short compared to one’s lifespan.

How Long Does Bankruptcy Stay on Your Record?

How long bankruptcy negatively impacts your credit score depends mainly on the type of bankruptcy you file. Chapter 7 versus Chapter 13 on a credit report is different from each other. Chapter 7 bankruptcy remains on your credit report for ten (10) years, while Chapter 13, which involves repayment, stays on your credit report for only seven (7) years. Each of these types of bankruptcy and their presence on your record are discussed more below.

How Long Does Chapter 7 Stay on Your Credit Report?

How long will bankruptcy stay on your credit report? If you file a Chapter 7 bankruptcy, you’ll probably have to wait the full ten years – the maximum timeframe – for record of the bankruptcy filing itself to disappear from your credit report.

how long does chapter 7 stay on your credit report?

Individual debts included in the bankruptcy, however, may disappear sooner. You can look for these in your credit reports from one of the three bureaus – Experian, Equifax or Transunion – all of whom are legally required to provide you a copy of your credit report upon request under the Fair Credit Reporting Act (FRCA). These agencies can tell you what your credit score is after bankruptcy.

Looking closely at the data on the reports, your individual debts may be listed as “included in bankruptcy” or “discharged” with a zero balance. In a Chapter 7 bankruptcy, the debts should fall off the sooner of either seven (7) years from the date delinquency on each account began, or seven (7) years from the date you filed for bankruptcy.

How Long Does Chapter 13 Stay on Your Credit Report?

How long is a bankruptcy on your credit report? As we’ve said before, Chapter 13 bankruptcy goes easier on the filer, and credit reporting outcomes are no different. Unlike the ten (10) years associated with a Chapter 7 bankruptcy filing, a Chapter 13 bankruptcy filing is removed from your credit report seven (7) years after filing. This is lighter treatment due to partial repayment of the debts included in the Chapter 13 bankruptcy.

how long does a bankruptcy stay on your credit record?

Also, the individual debts are usually paid off in some portion through a court-created and court-ordered repayment plan that stretches from three to five years. Therefore, individual debts may begin to come off your credit report during those three to five years.

Myths about Credit Score after Bankruptcy

Everyone wants to know when considering bankruptcy: How long does bankruptcy affect my credit? What will my credit score be after bankruptcy? Will I ever be able to apply for a credit card again without being “credit-shamed?” There are a few myths about credit scoring and credit post-bankruptcy filing that we like to debunk to give our clients some peace of mind.

One is that you can’t get a loan or credit card after filing for bankruptcy. This simply is not true. While Visa and Mastercard may not be sending you offers with frequent flier miles for a while, many clients successfully apply for “secured cards” to help them restore their credit faster. These cards require collateral, are available for people with damaged credit, and help build credit like any other card.

Another myth is that bankruptcy will ruin your credit forever. In fact, some imagine a dramatic movie where a character realizes they are bankrupt and yells “I’m ruined” to the heavens. But this is also a myth and not reality. Although bankruptcy will damage your credit in the short term, its impact will absolutely be gone from your credit report after no more than ten years. And there are opportunities to practice good financial habits along the way, such as paying bills on time and avoiding purchases you do not have the income to pay for, which will make your credit stronger than ever.

Let the Law Offices of Kretzer and Volberding P.C. Help You Navigate Bankruptcy

With an open mind and a skilled attorney guiding you every step of the way, bankruptcy does not have to represent financial hopelessness but instead can be about your empowerment and a chance at a fresh start. You will need a lawyer with specific experience on bankruptcy in Texas and who has the right knowledge and resources to help you.

Contact The Law Office of Seth Kretzer today to schedule a free consultation.


Phone: 713-775-3050
Fax: 713-929-2019
Houston, TX 77002
440 Louisiana, Suite 1440