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How long with bankruptcy impact my credit?

On Behalf of | Sep 1, 2020 | Bankruptcy

Filing bankruptcy can help you to fix your financial situation. You can avoid collections and judgements. It enables you to move forward in a better place than you were prior to filing. 

However, bankruptcy does not come without its penalties. Once you get your bankruptcy discharge, it goes on your credit report. Anyone who considers extending your credit will see that you filed and hold that against you. 

How long it stays

According to Nerdwallet, when you file a Chapter 7 bankruptcy, you can expect it to remain on your credit report for 10 years. A Chapter 13 bankruptcy will stay on your credit report for seven years. 

You should note that all the debts you discharged in your bankruptcy will come off your credit report. So, you may see an up and down in your credit score right after you file and during the course of your bankruptcy until after the discharge. 

How long to rebuild

Your credit score will see a rebound once your collections, judgements and other debts come off your credit report. You will often see your credit report begin to go up a few months after your discharge. However, you will need to secure credit in the future to continue rebuilding your score. 

You also may find it is easier to get credit even with the bankruptcy. The reason for this is that lenders know you cannot file bankruptcy again for eight years, which means you will have to pay your debts. This lowers the risk to the lender since they will be able to use collection efforts to recoup the debt.