How Long Will a Bankruptcy Show up on My Credit Report?

People often delay filing bankruptcy because they are afraid of how long bankruptcy will show up on their credit report. How long it stays on your credit report depends on which chapter of bankruptcy you file. Most individuals or small businesses file either Chapter 7 bankruptcy (straight bankruptcy) or Chapter 13 bankruptcy (debt reorganization.) Here’s how long Chapter 7 or Chapter 13 can be reported:

Chapter 7 bankruptcy is reported for up to 10 years. Debts forgiven in bankruptcy are shown at zero balance with the notation “account included in bankruptcy.” The history of late payments before the bankruptcy is filed may still be reported.

Chapter 13 bankruptcy is reported for 7 years. While Chapter 13 is pending (3 to 5 years), the creditor may report the account as delinquent. Once the discharge is given, the creditor must change the report to zero balance – account included in bankruptcy.

Just because bankruptcy is reported for 10 years does not mean you can’t buy a home or finance a car for 10 years. It does mean you will need to take steps to get rid of negative reports about delinquent debt. Bankruptcy and delinquent debt both affect your credit score. Replace the negative reporting with positive reports of debts being paid on time. This will increase your credit score. Studies show you may improve your credit score faster with bankruptcy.