Length of Time Bankruptcy Remains on Your Credit Report

credit history bankruptcyAlthough bankruptcy helps many folks manage a large amount of debt and get back on their feet, the effect it leaves on one's credit report could prevent the individual from acquiring a loan for a long time.

Individuals who file for Chapter 7 bankruptcy will have it appear on their credit report for ten years. Since the individual pays for a portion of their debt when filing for Chapter 13, this only remains on one's credit report for seven years.

The further into the past a bankruptcy case occurred, the more likely the individual will qualify for new credit. Bankruptcy filers may be able to obtain credit within a few months or years of their bankruptcy case, but the credit may come with high interest rates or fees, or in some cases, both. Sometimes lenders will not grant credit while a bankruptcy file appears on a credit report. 

According to Debt.org, approximately 8 percent of individuals who file for bankruptcy have filed before. When a lender finds out about a bankruptcy history, they know there is a risk that this person might file again. Lenders do not want to give money to people they believe might not be able to pay them back. This is not always the case, but usually, it is very hard to receive a loan until bankruptcy has been removed from a credit report. 

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