Bankruptcy On Credit Reports
Bankruptcy Filing On Your Credit Report
How long does bankruptcy on credit reports remain? It depends on whether you file a Chapter 7 or a Chapter 13. A Chapter 7 remains on your credit report for 10 years from the date it was filed. A Chapter 13, however, remains on your credit report for seven years after it was filed. Keep in mind that the time runs from the date the bankruptcy is filed and not the date of your discharge. This is a critical factor because it raises questions about whether the bankruptcy can be removed from your credit file if you later dismiss the proceeding.
A Recent Bankruptcy Does Not Mean Ruined Credit
Some people consider their credit to be ruined during the time bankruptcy on credit reports remains. That is not true. The fact is that you are allowed to file statements to explain matters in your credit files and these will be released to potential creditors who ask to see your reports. Of course, the statements have no bearing on your credit score and most creditors will not even review your credit report unless your score falls within its acceptable range. Nevertheless, you should provide a statement regarding why you had to file bankruptcy such as huge medical bills caused by an operation, bills from a divorce, etc.
Start Rebuilding Your Credit Rating
Another factor to keep in mind is that some creditors will extend credit to you because they know you cannot file bankruptcy again for seven to 10 years. Such creditors will most likely charge you the highest interest rates allowed by law but at least you can begin to rebuild your credit standing. Other creditors might extend credit to you after a year or two from your discharge date and will offer you more favorable terms if you have avoided any other negative items since your discharge. So even though a bankruptcy will remain in your credit file for seven to 10 years, that does not mean you will be unable to get credit during that time. You will get the fresh start envisioned by Congress when it passed the law.
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