One common question I hear is what happens on your credit report when you file bankruptcy ? The first thing you need to realize is bankruptcy filings are a public record. The fact you filed for bankruptcy can legally be listed on your credit reports. As long as it is listed on your report your bankruptcy can impact your credit. The effect of having a bankruptcy on your report can be negative but in some situations you can actually turn it into a positive. It all depends where your credit score was at the time your bankruptcy case was filed.
If your credit history was considered healthy before the bankruptcy, it may be hit your report harder than someone with poor credit. Ultimately, how bankruptcy affects credit can vary, partially because of the various factors that make up your credit history and credit score. According to the Fair Credit Reporting Act, a Chapter 7 bankruptcy may stay on your reports for 10 years from the date you file. A discharged Chapter 13 bankruptcy typically stays on your reports for seven years from the date you file, but it could remain for up to 10 years if you don’t meet certain conditions. Both types have the same impact on your credit scores. However, it’s possible that a future lender could view a Chapter 13 bankruptcy more favorably than a Chapter 7 bankruptcy. Accounts included in a bankruptcy filing won’t be reported as “unpaid” or “past due” anymore, and your credit history and score may feel relief without those financial issues being listed.
Many of these types of questions are answered in my new book: Life After Bankruptcy: The Game Plan to Rebuild, Renew and Restore your credit after bankruptcy. Copies of the book are available on my website here – The Utah Bankruptcy Guy.