How Long Does Bankruptcy Stay On Your Credit Report? | Chase (2024)

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How Long Does Bankruptcy Stay On Your Credit Report? | Chase? ›

Debts such as child support, alimony, most student loans, and certain tax debts are typically not discharged. A Chapter 7 bankruptcy is typically removed from your credit report 10 years after the date you filed, and this is done automatically, so you don't have to initiate that removal.

During this 12-18 month period, your Fair Isaac Corporation (FICO) credit report can move from bad credit (usually less than 579) to the fair range (580-669) if you actively work on rebuilding your credit. But getting a good (670-739), very good (740-799), or excellent (800-850) credit score will take more time.

In general, most debt will fall off of your credit report after seven years, but some types of debt can stay for up to 10 years or even indefinitely. Certain types of debt or derogatory marks, such as tax liens and paid medical debt collections, will not typically show up on your credit report.

A bankruptcy drops off your credit report after 10 years if you file for Chapter 7 bankruptcy, or after seven years if you file Chapter 13 bankruptcy. As long as it stays on your credit reports, a bankruptcy can hurt your credit scores, but its impact on scores lessens over time.

Your first option is the waiting game. Generally, a Chapter 7 filing stays on your record for 10 years, while a Chapter 13 filing remains on your record for seven years. Your other option is asserting that your bankruptcy case was filed incorrectly, and it should be removed from all credit reports moving forward.

According to experts, if you work consistently to rebuild your credit after filing for bankruptcy, it could take up to 24 months to raise your credit score to the 'Fair' category, which is 650 or higher.

A score of 850 can only be achieved with 10+ years of credit, excellent on-time payment history, low credit utilization, and no recent hard inquiries, which is a tall ask. At the very least, you can take these 12 steps to improve your score.

2) What is the 609 loophole? The “609 loophole” is a misconception. Section 609 of the Fair Credit Reporting Act (FCRA) allows consumers to request their credit file information. It does not guarantee the removal of negative items but requires credit bureaus to verify the accuracy of disputed information.

Although the debt won't be factored into your credit score after seven years, there are still consequences. When you stop paying your debt, the creditor will start charging late fees and interest will continue to accumulate, increasing the balance you owe.

How much will your credit score drop right away when you file for bankruptcy? ›

Immediate Impact of Bankruptcy on Credit

A person with an average 680 score would lose between 130 and 150 points in bankruptcy. Someone with an above-average 780 score would lose between 200 and 240 points.

If you have filed for Chapter 7 bankruptcy, once the bankruptcy court grants a discharge, all of the debts that were included in the bankruptcy will reflect that fact on your credit report. That means that your debt to income ratio will improve, improving your score in that regard.

Bankruptcy significantly impacts credit scores, limiting access to loans and credit cards. Rebuilding credit takes time and effort but can be achieved through proactive measures and monitoring. Rebuilding credit includes making timely payments, checking credit reports and applying for new credit lines with discernment.

11 U.S.C. § 524(f). An individual receives a discharge for most of his or her debts in a chapter 7 bankruptcy case. A creditor may no longer initiate or continue any legal or other action against the debtor to collect a discharged debt. But not all of an individual's debts are discharged in chapter 7.

The credit bureaus collect information regarding bankruptcy cases from the Bankruptcy Court's public records. No matter the status of your case (open, closed, discharged, dismissed, etc.)

All of these factors and many more contribute to the overall duration of a pending bankruptcy case. That said, most cases typically resolve within four to six months. This means that you may be able to apply for a new credit card within the same calendar year that you file and complete bankruptcy.

The two most common types of consumer bankruptcy are Chapter 7 and Chapter 13. Chapter 7 will discharge (eliminate) most or all consumer debts so they do not have to be paid. Chapter 7 is over in a few months and you can begin rebuilding credit quickly, but it will remain on your credit report for 10 years.