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In the early days of the pandemic, most people expected to see a massive wave of bankruptcies in the wake of lockdowns and restrictions. To the surprise of many, that hasn’t happened yet. Right now, government stimulus money is helping to prevent the inevitable.
When pandemic relief ends, bankruptcies will begin to spike. If you’ve become overwhelmed by debt over the past few years, then you may find yourself needing to exercise your right to file for bankruptcy, too. Before you make your decision, you may have questions, though. For instance, you may be wondering – how long does bankruptcy stay on your credit report? Learn the answer below.
Where Does Bankruptcy Appear on Your Credit Report?
Regardless of the type of bankruptcy you file for, you’ll want to know where exactly it shows up on your credit report. Your bankruptcy status will appear in conjunction with any debts or accounts that will get addressed throughout your bankruptcy proceeding. For instance, if ‘Loan A’ was discharged as a result of your bankruptcy, then you’ll still see the debt appear in your credit report. It will say something like ‘Loan A: Discharged in bankruptcy’.
Prior to your bankruptcy, these debts will either show ‘current,’ meaning you’re keeping up with the payments, or ‘delinquent’ if you’ve fallen behind on them. Each time a potential lender looks into your report, they’ll see those accounts, which means they’ll know you filed for bankruptcy in the past. We know what you’re thinking – ‘How long does bankruptcy last on my report?’. This answer depends on the type of bankruptcy you file for.
How Long Does Chapter 7 Stay on a Credit Report?
If you’re an individual who has taken on way too much debt and you know you can’t pay it off, then a Chapter 7 bankruptcy may be exactly what you need. With these plans, you won’t have to repay your debt, but you may have to sell off some of your assets. Some assets, like your home or car, may be exempt from getting sold off. You may not be able to file for Chapter 7 bankruptcy if you make a higher-than-average income.
So, when does bankruptcy come off a credit report if you file a Chapter 7? Because you aren’t expected to repay the debt at all, this type of bankruptcy will remain on your report for ten years from the date you filed for a Chapter 7 bankruptcy.
How Long Does Chapter 13 Stay on a Credit Report?
A Chapter 13 bankruptcy helps you get most of your debts discharged, but you are still expected to pay off a portion of your debts. How so? You’ll get ordered to participate in a repayment plan that will last about three to five years. So long as you adhere to the plan, the rest of your debt will get discharged once your plan ends.
In a nutshell, your partial repayment means the bankruptcy will fall off your report faster than if you filed for a Chapter 7 bankruptcy. With a Chapter 13 bankruptcy, you can expect it to remain on your credit report for seven years from the date on which you filed for bankruptcy.
How Long Does a Chapter 11 Stay on a Credit Report?
A Chapter 11 bankruptcy is mainly used by businesses who need help managing their debts. This type of plan does require you to repay some of your debt. A Trustee is assigned to the case who will determine whether the business has the income and resources to follow through with a specific payment plan to pay off its debts. After a certain agreed upon time of paying off your debts, the rest of your debts will get discharged.
A chapter 11 bankruptcy case will stay on your credit report for ten years.
How Long Does a Bankruptcy Stay on Your Credit Report?
Have you found yourself wondering — how long does bankruptcy stay on your credit report? Regardless of the type of bankruptcy you need to file for, you should have a clear answer after reading this article.
Many Americans make the mistake of thinking that filing for bankruptcy will follow them forever. The good news is that bankruptcy will only continue to impact your credit for a few years before falling off your report forever. Your bankruptcy filing and case will remain in public records, but it’s not likely that anyone would dig up that information or that it would impact your future after the first few years.
Are you ready to settle your debt and find real financial relief? Our professionals can help you determine if you qualify for debt relief and help you navigate the next steps forward. Contact us now to learn more about your options.
Gabriel Gorelik paves the way for customer service and operations at United Settlement. He is passionate about numbers and holds a strong belief in helping anyone with their debt. Before United Settlement, Gabriel received his BS in Finance & Economics from Brooklyn College. After graduation, Gabriel went on to build his first financial services company where he managed thousands of accounts for business and consumer clients. He understands the importance of client satisfaction, professionalism, and exceeding expectations.