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How Long Does Bankruptcy Stay On Your Credit Report?

Published 5/24/08 (Modified 6/17/11)
By MoneyBlueBook

According to the Fair Credit Reporting Act (FCRA), a consumer reporting company is officially permitted to list accurate negative information on a consumer's credit report history for seven years (7) and bankruptcy information for ten (10) years.

Information regarding a lawsuit or judgment against you can be reported for seven years or until the statute of limitation expires, which ��ever is longer. There is no time limit on reporting information about crimi��nal convictions, information that is reported in regards to a job application for a salary of more than $75,000 a year, nor is there a time limit on information reported because of an application for $150,000 worth of credit or life insurance. Thus, unless the reported information is otherwise determined and proven to be inaccurate, incorrect or downright fraudulent, negative information on your credit report can only be removed or marginalized through the passage of time.

It's the job and duty of the credit reporting agencies to store and maintain accurate information about consumers by collecting data from credit granters and public records, including bankruptcies, judgments, and liens. Potentially negative information or remarks, such as missed payments and most public recordations, generally remain on a personal credit report for 7 years, with the exception of Chapters 7, 11 and 12 bankruptcy filings, which remain for 10 years. Unpaid tax liens remain for 15 years while paid tax liens remain for 7 years. Positive information may remain on a report indefinitely, and paid-for closed accounts generally display for 10 years. Requests for your credit history remain on your personal credit report for 2 years.

While the Fair Credit Reporting Act places limits on the time period that negative information such as a bankruptcy filing notation may remain on one's credit report, the actual time period it will remain will vary depending on the type of bankruptcy filing and whether the bankruptcy procedure was properly discharged, halted, or dismissed. The length of time that a bankruptcy filing stays on the credit record will depend on which one of the two common consumer bankruptcy proceedings was filed - Chapter 7 or Chapter 13:

  • Chapter 7 Bankruptcy - Chapter 7 is a type of straight bankruptcy procedure also known as a liquidation proceeding. This type of last resort bankruptcy filing is for those who have little assets or income, and have incurred so much debt that only a complete sell off will properly heal their financial position. Under Chapter 7, the debtor turns over all non exempt property to the bankruptcy trustee who then converts it to cash funds for distribution to the various creditors. The debtor then receives a discharge of all dischargeable debts, usually within four months. In the great majority of Chapter 7 bankruptcy cases, since the debtor had no significant assets to hold onto, the Chapter 7 filing will give that person, who was previously encumbered by crushing debt, a new opportunity at a fresh start. Most major unsecured creditors such as credit card companies hate this form of bankruptcy filing since they stand to lose the majority value of their unsecured debt claim again the debtor upon completion and discharge.
  • Chapter 13 Bankruptcy - Chapter 13 is also known as a reorganization bankruptcy and differs from Chapter 7 in that instead of forcing the debtor to sell off nearly all of his or her possessions, it affords the filer the opportunity to keep most them and enter into a court mandated payment plan. From the start of filing, the Chapter 13 bankruptcy debt restructuring process takes over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep and is the preferred choice for people who are struggling with the burden of debt but still have the income or assets to cover some payment obligations. For individuals who maintain a predictable income stream and whose income is sufficient to pay reasonable expenses with some amount left over to pay off their debts, this is their only bankruptcy option.

Notwithstanding the FCRA, The Big Credit Reporting Agencies Have Customary Policies Of Reporting Chapter 7 Filings For Ten (10) Years and Chapter 13 Filings For Seven (7) Years

Although the federal Fair Credit Reporting Act does provide that bankruptcy notations can remain on your credit report for 10 years, most creditors will only leave a chapter 13 bankruptcy on your record for 7 years from the time of filing, instead of the 10 year maximum. They do this primarily to encourage people to pay part of their debts rather than discharge everything under a Chapter 7 bankruptcy filing. Since a Chapter 13 debt repayment process typically takes 3 to 5 years to complete, the bankruptcy notation on your credit report likely won't be removed until 2 to 4 years after the debt repayment procedure has been fulfilled and properly discharged to the bankruptcy court's satisfaction.

Despite some reported online information to the contrary, the reports that Chapter 13 reorganization bankruptcy appears on one's credit report history for a period of 7 years from the date the case is completed and discharged, and that there may be a cloud of bankruptcy for 12 years from filing, such indications are categorically false. The 7 year reporting period is from the date of Chapter 13 filing, not from the date the several year Chapter 13 process is completed. The bankruptcy discharge date has no bearing or effect on when the bankruptcy filing information expires and is expunged from the credit report.

This cloud of Chapter 13 bankruptcy debate is obviously less applicable to Chapter 7 filings due to the comparatively quicker speed and pace at which Chapter 7 liquidation proceedings are usually completed.

There Is Less Reporting Consistency When Bankruptcy Filings Are Dismissed By The Court Or Filer, Without A Proper Discharge

Not all Chapter 7 or Chapter 13 bankruptcy filings successfully run their course and get discharged by the bankruptcy court. Sometimes, the court can dismiss a bankruptcy case, the trustee can request dismissal, or the debtor can file a voluntary dismissal for various reasons. Regardless of stoppage method, a bankruptcy dismissal derails the bankruptcy petition and procedure, and eliminates the automatic stay provision of bankruptcy where creditors are forced aside while the bankruptcy court assumes control. Without the automatic stay protection, creditors are able to once again resume collection activities against the debtor.

But despite the dismissal itself which is required to be recorded on all credit reports, the original bankruptcy filing will continue to remain on the filer's credit history for a certain period of time. One thing to note is that creditors and credit bureaus report bankruptcy dismissals differently - the time period can be anywhere from seven to ten years. That said, most other negative data and remarks on your credit report do drop off after seven years from when it was placed on the report. Here is how the big three credit reporting agencies treat subsequently dismissed bankruptcy filings:

  • Experian - The Experian credit reporting agency doesn't list bankruptcy dismissals as a separate reporting item. On its frequently asked questions page, Experian indicates that: "Missed payments and most public record items remain on the credit report for seven years, with the exception of Chapter 7, 11 and 12 bankruptcies, which remain for 10 years, and unpaid tax liens, which remain for 15 years." Thus the indication is that Experian reports all Chapter 7 filings, whether properly completed and discharged, or whether abruptly dismissed, for a period of 10 years. All Chapter 13 filings, whether discharged or dismissed appear to be reported for seven years (7) from the date of filing.
  • TransUnion - Trans Union material on its website indicates that the typical retention period for Chapter 13 bankruptcies that have been either dismissed or discharged remain on file for seven (7) years.
  • Equifax - On its website, Equifax states that it keeps in its credit reports all dismissed Chapter 13 filings for ten (10) years from the date filed. Discharged Chapter 13 filings on the other hand are only reported for seven (7) years from the date filed.

Of the big three credit reporting bureaus of Experian, TransUnion, and Equifax, it appears that only Equifax reports dismissed Chapter 13 filings for ten years. The other two report dismissed Chapter 13 filings for only seven years. Because the credit reporting agencies receive and report their data independently of each other, there's always bound to be some differences in their information retention and reporting policies. Be sure to check your free credit report and free FICO credit score on a regular basis - preferably at least once or twice a year. You want to catch accidental errors, mistakes, or even fraudulent transactions before they ever get out of hand.

While Bankruptcy Filings Represent A Detrimental Mark On Your Long Term Credit Reporting History, It's Not The End Of The World, And The Negative Effects Do Fade With The Passage Of Time

These days, just because someone has to file for bankruptcy protection doesn't necessarily mean the person is broke. Bankruptcy can occur for many reasons, and it's certainly not always the fault of the person who borrowed money in the first place. There are a variety of unforeseen situations and life emergencies that may cause one to file for bankruptcy including persistent unemployment, sudden illness or injury in the family, or simply the inexperienced use of certain financial instruments like credit cards. The reality that consumers must recognize is that bankruptcy is not the cure all for financial distress or ailments, but should be regarded as a small part of an overall strategy to financial and fiscal stability. Bankruptcy will help you keep the creditors off your back and get you on your own financial feet again, but it's important to acknowledge that there are long term repercussions to such a filing. But at the same time, it's also important to know that your business and consumer life won't just end with a one time filing for bankruptcy help.

With the passage of time, the negative reputation that follows filers of bankruptcy fades, weakens, and becomes less pronounced. Your credit rating will unlikely remain low for the entire time that the bankruptcy information remains on your credit report, and will more likely than not gradually rise over time. Credit scoring takes into account the age of the derogatory stain, and gradually discounts the value of that information the older it is. Therefore, the more time that passes the less effect the bankruptcy mark will have on your credit score. Thus after bankruptcy discharge, a two year old bankruptcy will likely mean more to potential future creditors than a five year old bankruptcy because creditors are primarily interested in present financial circumstances. If one's debt to income ratio is much improved from past years, the negative effect of a prior bankruptcy is likely going to be minimized. So keep in mind that negative history on your credit report is just that - history. It's just something credit lenders will take into consideration when they evaluate your overall credit worthiness in the future. It does not doom you to perpetual credit rejection or credit purgatory, but it will challenge and should embolden you to strengthen your financial future by saving and using credit more carefully.

The truth and oddity of it all is that the bankruptcy debtor will probably be a much better credit risk and more credit worthy after bankruptcy than before the filing. Some have suggested that the effect of bankruptcy on one's ability to obtain future credit is vastly overstated and on some level I have to agree. While your past credit reporting history has a significant effect on how potential creditors perceive you as a possible credit risk after bankruptcy discharge, the key to getting credit also has to do with your present income situation as well. If you have a decent job with good present income, creditors will likely be willing to look past your credit report to the contents of your wallet if possible. Even with a bankruptcy on one's record, it may still be very possible to get loans for new cars and new credit cards, or even a mortgage for a new house. Creditors may not offer you the best rate, but if you have good present income, even a person with an active bankruptcy filing mark on their credit report can still get the credit they want in many cases. Of course this will depend on the condition of the overall credit market. In super tight credit markets, lenders may be less inclined to assume any type of financial risk that may remotely be construed as questionable.

Another reason why former bankruptcy filers strangely become more attractive to certain creditors after emerging from bankruptcy protection is that creditors know that the former debtor is precluded from filing again for many years.

A Chapter 13 bankruptcy can only be filed again if:

  • The debtor received a bankruptcy discharge under Chapter 7 more than four years ago, or
  • The debtor received a bankruptcy discharge under Chapter 13 more than two years ago.

A Chapter 7 bankruptcy can only be filed again if:

  • It has been more than eight years since the debtor filed the previous Chapter 7 bankruptcy.

Because creditors are keenly aware of the bankruptcy filing limitations after discharge, it helps to explain why former and recent bankruptcy filers often see new credit card applications arrive at their doorsteps very soon after bankruptcy emergence. My advice is to avoid all new credit card and loan applications altogether until you can get back on proper financial footing and develop a more mature perspective on managing credit and debt obligations.

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29 Responses to “How Long Does Bankruptcy Stay On Your Credit Report | Money Blue Book” 

  1. Brenda says:

    I'm considering asking for a dismissal but, if I do, I'm going to see if the Court will order the credit reporting agencies not to report the filing. I don't know if they can, but I'm going to try. If anyone else knows the answer, please let us know. Thanks.

  2. Maria says:

    I would also like to know how I can remove an 8 year old dismissed chapter 13 bankrupty off of my Equifax report. Any suggestions?

  3. Nivia Says says:

    It has been almost 4 years since i filed chapter 11. How long can a debtor may report on your credit report? I have creditor's on my credit report that i haven't dealt with but somehow have to do with the previous debtor. What can I do? Any suggestons?

  4. Pierce says:

    We all seem to be sucked into this numbers game, Do what you have to do to get up on your feet again , Then dont buy anything unless We have the money for it,Lets show them we dont need there numbers anymore,Eat,work ,sleep,SAVE.

  5. Sheila says:

    I need some help advice pls... I just got paper lawsuit against me.. I owe 2,000 on credit card. I couldnt afford it cuz I have SSI. My mother messed it up my credit. If I filed bankcruptcy, How many years to get credit score back to normal and able to get bank account? If I filed bankcruptcy I dont wanna wait 7 or 10 years to have my credit back to normal.. What options do I have ? Please help me. Thanks

    Which should I do:

    1. Filed bankcruptcy

    2. Pay debt instead filed bankcruptcy

  6. Carmen says:

    I owe 6,000 in credit debt and i just lost my condo to forclosure and I just got served for not paying 4,000 in association dues. I was going to go with a consolidation credit card company to pay off the 6,000 but, i got served now i don't know what to do????

  7. VKB says:

    I've owed about $32,000 in credit card debts and I've held no job right now. I want to file for bankruptcy so the creditors won't go after me. But I have no $$$ to do so. I don't know what to do now so I decide to leave it hanging by not paying and not filing for bankruptcy at the same time. I've hit the rock bottom right now and I do not see any light to my future. I don't know if I can live til next week, so I have nothing to lose now.

  8. T. williams says:

    Went through the same thing you did. You can do your own filing and it only cost the filing fee. Also, read Phillipians 4:6!

  9. Mylie says:

    I have something to say about Lexington Law. I also warn you not to waste your money on this company. I tried them out for 2 long years and the end result not satisified. Three items was removed from my report but only for a limited time. months after it was removed, I don't know how or why but it was placed back on my credit report so i wasted all this money!!! Don't waste your money, I am warning you and you know that warnings come before destruction!!!

  10. Kwatford says:

    Dear Friends,
    It Hurts me to my heart to read paragraph after paragraph of each of us asking each other for help, fighting theses crooket crediting reporting agency when we have the power to change these senseless reporting ourselves. A dismissed bankruptcy has no right being on your credit report. Once a bankruptcy has been dismissed you and the creditor has the same right. Its not consider a bankruptcy until its confirmed, lets fight together to get this myth changed that a dismissed bankruptcy has to stay on your file for 7 or ten years. I invite anyone to show me the law that say it does, theres no law. The bueraus say and do whatever they want and all we do is follow and chat about it. Anyone who intrested in getting this myth changed. Email me and let me know that i can count on you and your support and changing this myth, because i'am working right now at 2:30 am in the morning to help change my life and yours, Email me at Kwatford@futranet.com and give me your support. Together we stand devided we will eventually fall. Ken

  11. glory hardy says:

    i have a dismissed ch 13 that was filed in 2001 and a discharged ch 7 from 2002 can these bankruptcies be removed. please help

    glory

  12. Kwatford says:

    If you plan to file a dismissal, you need to motion the court before your case is closed to seal the record, otherwise you will have to pay to have the case re-open. That's $200.00 in the State of Maryland, your State might be different.

  13. JJ says:

    Wait a minute, hold the phone. We just filed a Chapter 7 in Ohio and had our 341 meeting on 12/15/09

    I ordered our credit reports from Tranunion and they came today 01/07/10

    It states that our Chapter 7 will be removed from our reports in November of 2016 which is 7 years from the date of filing.

  14. Brian says:

    I filed for Chapter 13 in July 2001 and completed my plan in Sept 2005. I was never late once for a payment on anything since my day of filing. In September of 2008 I ran my credit report because when I tried to buy a car the dealer told me that my credit was shot. I was quite surprised to see my report, all 3 of my scores were under 450. I then joined Lexington Law to get the negative items removed (not knowing you can just do it yourself). For the first 6 months nothing happened, then old negative items started being removed pretty quick then they stopped at about 12 months.

    They got the easy ones removed that I could have done myself but they do not put any effort into the ones that refuse to remove negative items. I have a credit union still reporting my Chapter 13 on an auto loan (now over 8yrs old) and a collection agency reporting a delinquency that they cannnot even substantiate that is over 8yrs old.

    In short DO NOT USE Lexington Law. You will spend $900+ / year and they will do nothing for you that you cannot do yourself.

  15. Karen says:

    My bankrupsy has been over 15 years ago why is it still showing up and how can I force them to remove it?

  16. Emma from Houston Texas says:

    My husband filed a chapter 13 bankruptcy in July 2001, it was dismissed by the courts, he has not paid any money, voluntarily let the car and the car loan go. It will be removed from Equifax next year July 2011. Experian and Trans Union has removed it after 7 years, but Equifax will keep it 10 years.

  17. Emma from Houston Texas says:

    Karen, challenge the credit bureau, do a dispute letter to each of them, then send in a copy of the dismissal letter. They have 30 days to respond and if they don't respond, they will have to delete the info from your credit report. This is the law. Please send the dispute letters certified so you can have a copy of your paper trail. This is free advice. Take it and run with it.

  18. Kwatford says:

    We have to start directinh our furstration towards the people who can make the change, the federal government, if we get enough voices together and scream int he right ear we can make them change the law. I have given everyone who uses this site valuable info, free. I have a non-profit organization that i want to use to fight Trans Union and especially Eqaifax Credit Reporting Agency Experian is a little bit understanding of consumers. I challenge everyone of you instead of wasting your money on credit repair that may or may not work, dealing with these dirty rotten creditors, who wants you to keep bad credit anyway, so they can charge you double in intrest. I need 1 million of you to donate $5 dollars to this none profit organization and we will have not only a voice in congress but a force. When the new credit laws was changed in 2007 all the consumer got from it was a free credit report once a year. Why! because we where working in the field, while the lobbyist and credit agency was in the big house in bed with each other screwing the consumers. If you want change, lets make change, email me if you are intrested, I will give you the company Attorney and you can make your donation. Not only do you just make a donation, its tax dedutible. I care about the American Citizen, you mean more to me than a number. I proud to be a united States Army Veterean. For all my fellow solider you know what we went through to make this a Great Nation for all people. Together we stand divided we will fall.

  19. Katrina Monak says:

    Please contact me for the 5.00 donation. I have had identiy theft since 2005. After taking a week long vacation and spending it with a detective on my case in Georgia, I finally found my fraud. I have answers for bankruptcies that were filed before the laws changed.

  20. Victoria Finch says:

    This is a very confusing subject. Please find below the follow excerpt from the Fair Credit Reporting Act:

    �� 605. Requirements relating to information contained in consumer reports [15 U.S.C. ��1681c]
    (a) Information excluded from consumer reports. Except as authorized under subsection (b)of this section, no consumer reporting agency may make any consumer report containing any of the following items of information:
    (1) Cases under title 11 [United States Code] or under the Bankruptcy Act that, from thedate of entry of the order for relief or the date of adjudication, as the case may be,
    antedate the report by more than 10 years.

    Chapter 13 falls under title 11 (United States Code) The 10 years is a maximum not a minimum ("by no more than") The credit reporting agencies are not required to keep the filings on consumer credit reports for 10 years but they often do.

    I am a credit expert and from what I have observed the article is correct in stating how long each bureau leaves bankruptcies on credit reports. This does not mean that they cannot be disputed due to inaccuracies.

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