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How Long Does Bankruptcy Appear on a Credit Report? 

COFFYLAW, LLC > Blog  > How Long Does Bankruptcy Appear on a Credit Report? 

How Long Does Bankruptcy Appear on a Credit Report? 

Having a favorable credit report is important. A good credit score determines whether you qualify for secured and unsecured loans and the interest rates you will pay for using someone else’s money. Although some people may be able to pay cash as they go through life, most need financing to garner their piece of the American dream. 

Without a doubt, bankruptcy is hostile to credit reports. It will appear on your report when it is filed and remain there for a period of time. Your credit score will take a hit. You will need to work to restore your credit.  

Although this reality may make you shy away from filing for Chapter 7 or Chapter 13 bankruptcy, it should not if your financial situation has become unbearable. Federal law establishes bankruptcy as a means to not be punished for your debt by providing the opportunity for a fresh start.  

Filing for bankruptcy usually isn’t an easy decision. COFFYLAW, LLC works with hundreds of clients in New York, New Jersey, and across the nation who are considering bankruptcy. It is important that you explore all options, receive trusted legal and tax guidance, and fully understand the short- and long-term effects of bankruptcy. COFFYLAW, LLC can help.  

How Long Will Chapter 7 Bankruptcy Appear on My Credit Report? 

Chapter 7 is the liquidation bankruptcy because it eliminates all dischargeable debts you include in your bankruptcy filing. It can liquidate unsecured debt such as credit cards, payday loan debt, and medical debt. It can also liquidate secured debt, such as a mortgage or auto loan, although you may need to surrender your home and auto to do so. Chapter 7 won’t discharge alimony and child support arrearages, but may help you catch up and stay current going forward.  

This bankruptcy is designed to help those who will never be able to repay the debt they owe. To qualify for Chapter 7, you must meet certain income requirements or pass a “means test” which determines your inability to repay your debt.  

The debt discharged in a Chapter 7 bankruptcy will be removed from your credit report soon after you file. However, the bankruptcy itself will remain on your credit report for 10 years from the date of filing. While a decade is a long time, you can begin rebuilding your credit and your credit score immediately, positioning yourself for a clean report once the term expires. 

How Long Will Chapter 13 Bankruptcy Appear on My Credit Report? 

Chapter 13 bankruptcy is a repayment plan for those who earn regular income sufficient to pay off, rather than discharge, their debt. Some debt may be negotiated to a lower pay-off amount, but you agree to a plan that allows you to pay off your debt within a three or five-year period so long as you avoid more debt and adhere to the repayment plan.  

Because you continue paying down debt rather than the court eliminating it, a Chapter 13 bankruptcy affects your credit report for seven years, rather than a decade. Again, you can start rebuilding your credit and credit score immediately so you can be in a solid position at the end of the repayment plan, even if the bankruptcy still appears on your credit report for longer.  

How Much Does Bankruptcy

Affect My Credit Score? 

Of course, bankruptcy’s effect on your credit score is significant. How far your credit score will lower after filing for bankruptcy depends on your individual circumstances and credit history.  

Suffice it to say that if you need to file for bankruptcy, your score is already low. That fresh financial start you get from bankruptcy will, at the end of the day, move your score in the right direction. You will need to avoid making poor financial decisions going forward, and if you file Chapter 13, you will need to adhere to the repayment plan.  

What Can I Do to Start

Rebuilding My Credit? 

You probably didn’t get into debilitating debt overnight, and you can’t rebuild your credit overnight either. It takes time, patience, determination, and a commitment to making sound financial decisions. You can get started right away.  

Begin restoring credit immediately, which will help even while the bankruptcy appears on your credit report:  

  • Do not acquire additional debt; 
  • Keep current on payments of any debt not included in the bankruptcy filing; 
  • Pay more than the monthly minimums on debt; 
  • Apply for and wisely use a secured credit card, paying off the full balance on time every month; or, 
  • Apply for a credit-builder loan through your local lender.  

Check your credit report on all three major credit bureaus to make sure all debt and the bankruptcy are reported correctly. Don’t merely assume your creditors have reported accurately.  

If debt on a credit card was fully discharged in Chapter 7, make sure your report reflects that. If you are continuing to repay debt, make sure the report reflects that until that debt is actually paid off. Once you pay it off, check the report to ensure that has been reported.  

You also need to check your credit report with all three bureaus at the seven-year mark for Chapter 13 and the ten-year mark for Chapter 7 to make sure the bankruptcy has fallen off your report. 

Skilled Guidance Every Step of the Way 

You might have acquired a heap of debt all by yourself, but there is no need for you to get out of it alone. COFFYLAW, LLC has helped hundreds of clients in New York, New Jersey, and throughout the country take full advantage of the opportunities provided by Chapter 7 and Chapter 13 bankruptcy.  

COFFYLAW, LLC doesn’t tell you what to do. Instead, they help you explore all options, learn how to make better financial decisions, and help you move forward.  

COFFYLAW, LLC has offices in New York and New Jersey. Contact them today to schedule a consultation about your financial situation and find out whether bankruptcy is the best option for a brighter future.  

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