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A bankruptcy expires, or "falls off" your credit report after 10 years if you file for Chapter 7 bankruptcy, or after seven years if you file Chapter 13 bankruptcy. In both cases, the expiration timeline is dated from the month you first filed for protection with the court (not when the bankruptcy procedure ends).
How Long Does Bankruptcy Stay on Your Credit Report?
Bankruptcy is a legal process that shields individuals with overwhelming debt from being sued by their creditors. It results in the cancellation, or discharge, of many (but not all) forms of consumer debt. When you file bankruptcy, your creditors typically cannot collect all you owe them, so lenders consider bankruptcies severe negative events. As long as a bankruptcy remains on your credit reports, it will hurt your credit scores, although its negative impact will lessen over time until the bankruptcy eventually expires.
Individuals have two options when seeking bankruptcy protection in the U.S:
- Chapter 7 bankruptcy: Chapter 7 bankruptcies can be relatively quick, sometimes taking just a few months, but they remain on credit reports for 10 years from the date of the initial bankruptcy filing.
- Chapter 13 bankruptcy: Chapter 13 establishes a repayment plan that lasts as long as five years, and a Chapter 13 bankruptcy entry remains on your credit report for seven years from the date of the initial bankruptcy filing.
Chapter 7 Bankruptcy: 10 Years
Also known as liquidation bankruptcy, Chapter 7 bankruptcy calls for forfeiture of property (with certain exemptions) to a trustee appointed by the bankruptcy court. The trustee sells the property and distributes the proceeds among your creditors.
Depending on the value of the forfeited assets, creditors may receive only a small portion of what they're owed and, in cases where the debtor has virtually no assets, creditors may collect nothing. A Chapter 7 Bankruptcy entry remains on your credit reports for 10 years.
Chapter 13 Bankruptcy: Seven Years
Chapter 13 bankruptcy, sometimes called a "wage-earner's plan," can allow individuals with sufficient income to keep more of their assets than with Chapter 7. You make monthly payments to a court trustee for a span of three to five years. The trustee uses the funds to repay your creditors some or all of what you owe them.
At the end of the repayment period, if you've made all payments as agreed, your remaining eligible debts are discharged. A Chapter 13 bankruptcy expires from credit reports seven years from the filing date.
Can You Remove Bankruptcy From Your Credit Report?
No, there is no way to remove an accurate record of bankruptcy from a credit report. It will appear on your credit reports within a month or two of your court filing, and will remain there until its expiration date—10 years from the filing date for Chapter 7, or seven years for Chapter 11.
If your credit report says you filed bankruptcy but you did not, or if a bankruptcy entry stays on your credit report past its expiration date, you have the right to dispute the inaccuracy with the credit bureau that compiled the credit report.
How to Rebuild Your Credit After Bankruptcy
It can be difficult to get new credit in the aftermath of a bankruptcy. Bankruptcy (and the missed payments that typically precede it) can leave you with a low credit score, and some lenders consider a bankruptcy on a credit report grounds for automatic denial of a credit application.
Rebuilding credit scores after bankruptcy can take several years, but you can jump-start the process with proven tactics for improving credit scores after bankruptcy, including:
- Become an authorized user. If you can persuade a friend or relative with a strong credit history to make you an authorized user on their credit card account, the card's payment history will appear on your credit reports as well as your loved one's. You and your credit scores will benefit from their track record of responsible payments.
- Get a secured credit card. With a secured credit card, you put down a cash deposit that serves as some or all of the borrowing limit on the card. If you fail to keep up with your payments on the account, the card issuer keeps the deposit. Using a secured card regularly for purchases or recurring payments and paying the balance each month establishes a positive payment pattern that can promote credit score improvement.
- Open a credit-builder loan. A credit-builder loan is designed to promote savings and to help individuals with short or damaged credit histories improve their credit scores. The lender issues you a small cash loan and places the funds in a special deposit account you cannot touch. You repay the loan in installments over a short period of time, generating a positive payment history on your credit reports in the process. When you finish paying off the loan, you gain access to the cash. If you fail to repay the loan, the lender keeps the money.
The Bottom Line
Bankruptcy can do significant damage to your credit, but it's not a permanent condition—and its goal is to give you a fresh start with your debts and finances. A Chapter 13 bankruptcy disappears from your credit report seven years after you file for protection with the court, and a Chapter 7 bankruptcy drops off your credit reports after 10 years. Bankruptcy's negative impacts on credit scores can diminish before they fall off your report, and as soon as a bankruptcy proceeding ends you can take steps to begin restoring your credit. You can monitor your progress in that effort by regularly checking your free credit score and report from Experian.
