How long will bankruptcy stay on your credit report?
According to a report by Fair Issaac, a company that issues FICO credit scores, Chapter 7 bankruptcy remains on a person’s credit report for up to 10 years from the date the case was filed.
In contrast, completed Chapter 13 bankruptcies typically get removed faster from the credit report – 7 years from the date the case was filed. For example, if you complete a 5-year Chapter 13 plan, that means that the record of your case would stay on your credit report for only two more years after completion of the case.
Keep in mind that court records can include older history of case filings.
Also, keep in mind that the credit report would include a notation about the the bankruptcy filing regardless of whether the case is successfully completed. This is one of the many reasons to make sure you understand the bankruptcy process, hire competent counsel who prepares the case right the first time so that you don’t have to refile, and who can help you change the bankruptcy plan as needed to make sure it works for you.
Also, just because the bankruptcy is still on your credit report, doesn’t mean you cannot take steps to improve your FICO credit score. Fair Isaac recommends checking your credit report periodically to make sure there are no mistakes; checking your report to make sure the bankruptcy is removed as soon as it is eligible to be removed from the credit report; and obtaining a secured credit card and continually making all payments on time. These steps will help your credit score rebound faster.
When excessive debt gets discharged through bankruptcy, and the person takes active steps to rebuild credit as suggested above, the credit score often becomes higher than before the bankruptcy case was filed within a period of less than a year.