How long will a Chapter 7 bankruptcy stay on your credit report?

Chapter 7 bankruptcy is a good solution for those who can pass the means test. If someone has an average or below-average income and moderate levels of personal assets, Chapter 7 is a viable option. It offers a quick path to the discharge of the balances owed on their unsecured debts.

Whether you owe thousands to a hospital for treatment not covered by your insurance or you fell behind on your credit cards when your employer closed their doors, a Chapter 7 bankruptcy can help you move on from those debts and rework your budget so that you don’t fall behind again.

Some people worry about filing for Chapter 7 bankruptcy because they know it will hurt their credit score. How long will your credit report reflect your bankruptcy discharge?

Bankruptcy stays on your record longer than other debts

Under federal credit reporting laws, most marks on someone’s credit report will only stay there for seven years after the creditor or lender first reports the account. However, bankruptcy stays on your credit score for longer. Following a Chapter 7 filing, the discharge ultimately granted by the court will remain visible on your credit report for 10 years from the date the courts grant the discharge.

Thankfully, the impact the bankruptcy has on your credit score will diminish a little bit every year. You may be able to qualify for decent credit terms or large financial instruments like mortgages within a few years of your bankruptcy discharge.

Learning more about the rules that apply in Chapter 7 bankruptcies can help you regain control over your finances more quickly.

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