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How Long Does Bankruptcy Stay on Your Credit Report?

Poor credit score report on wrinkled paper with pen and calculat

One of the biggest concerns many people have regarding bankruptcy is its potential effect on their credit report. While filing for bankruptcy will affect your credit, it will not last forever. After filing for bankruptcy, you can immediately start building your credit back up. Moreover, the bankruptcy will disappear entirely from your credit report after a number of years. Read on to learn about how an individual bankruptcy affects credit, and call a knowledgeable New Jersey bankruptcy and debt relief attorney to discuss how to build your credit score most efficiently and effectively after a New Jersey bankruptcy.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy involves working with a trustee to sell certain non-exempt assets in order to repay as much of your covered unsecured debt as possible. Any covered debts that remain will be discharged. The bankruptcy discharge will stay on your credit report for ten years from the filing date.

Individual accounts in arrears may disappear even sooner. A delinquent account that is covered by your bankruptcy will be listed as “discharged” or “included in bankruptcy” with a balance of $0. That notation should fall off your report seven years from the original date of delinquency or the date of the bankruptcy discharge, whichever is earlier.

Chapter 13 Bankruptcy

A Chapter 13 bankruptcy involves working with creditors to establish a repayment plan, under which you will repay your covered debts over a three or five year period. At the end of the repayment period, covered debts that remain unpaid will be discharged. Chapter 13 bankruptcy will remain on your credit report for seven years from the filing date. As with Chapter 7, individual accounts should disappear from your report seven years from the original date of delinquency.

Building Your Credit After Bankruptcy

Although the bankruptcy will remain on your credit report for several years, you will see your credit score start to rebound within months after you file. A finalized bankruptcy alone can help a debtor’s bankruptcy by reducing their debt-to-income ratio to essentially zero. Moreover, you can start taking active steps toward rebuilding your credit soon after filing. You may be able to obtain a secured credit card or a secured personal loan within months after filing, allowing you to build a credit history responsibly. So long as you repay your debts each month, you will see a marked improvement in your credit score.

Additionally, it is important to keep an eye on your credit report from all three credit bureaus and look out for errors. Specific debts from individual accounts should disappear from your credit report after the periods discussed above. If the seven years or other period has passed and, after a few months, the debt still shows up on your report, contact the credit bureau and notify them of the error.

If you are struggling with your mortgage, student loans, credit card debt, or other financial issues in New Jersey, contact a compassionate and effective Hamilton bankruptcy and debt relief attorney at Lance Brown & Associates at 609-587-5100 to discuss your options for financial relief.

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