Bankruptcy
Bankruptcy and Your Credit Report: What Happens and How to Recover
Bankruptcy is a fresh start, but your credit reports need to reflect it correctly. Here's what to expect and what to check.
Filing for bankruptcy is a major financial decision, and it has a real effect on your credit. But it isn't the end of your credit life. Many people see their scores start recovering within a year or two, especially when their reports are accurate.
How long bankruptcy stays on your credit report
- Chapter 7 can stay on your credit report for up to 10 years from the filing date.
- Chapter 13 is typically removed seven years from the filing date.
Individual accounts included in the bankruptcy generally fall off seven years from their original delinquency date, which may be before the bankruptcy itself is removed.
How included accounts should be reported
After a discharge, debts included in the bankruptcy should show:
- A $0 balance.
- A status like "included in bankruptcy" or "discharged in bankruptcy."
- No new late payments after the filing date.
Common bankruptcy reporting errors
Post-bankruptcy credit reports are frequently wrong, and those errors can keep your score artificially low:
- Discharged accounts still showing a balance owed.
- Accounts showing as charged off or in collections instead of included in bankruptcy.
- Collectors reporting a debt that was discharged.
- New late payments reported after the filing date.
- Accounts not included in the bankruptcy wrongly marked as included, or vice versa.
Keep a copy of your discharge order and schedule of creditors. Those are your proof when disputing. Here's how to read your credit report line by line.
What happens to your credit score
Your score will likely drop when you file, but if you already had several late payments and collections, the additional drop may be smaller than you fear. After discharge, your debt-to-income ratio improves and negative items stop accumulating, which is when recovery begins.
Rebuilding credit after bankruptcy
- Check all three reports 60 to 90 days after discharge and dispute errors.
- Open a secured credit card and keep the balance low.
- Consider a credit-builder loan to add installment history.
- Pay every bill on time, since new positive history carries a lot of weight.
- Keep utilization low. See our credit utilization guide.
More detail in how to rebuild credit from scratch.
Loans after bankruptcy
Waiting periods apply for mortgages after bankruptcy. For example, FHA loans generally require two years after a Chapter 7 discharge. Talk to a loan officer about the rules for your situation.
Make sure your fresh start shows up
30 Day Credit Pros reviews post-bankruptcy reports for accounts that aren't reported correctly. Request a free credit assessment to get started. We're not attorneys; for legal advice on whether to file, talk to a bankruptcy attorney.
Not sure which items on your reports are worth disputing? Our team will go over all three reports with you for free.
Get a Free Credit AssessmentFrequently asked questions
How long does Chapter 7 bankruptcy stay on a credit report?
Up to 10 years from the filing date.
How long does Chapter 13 bankruptcy stay on a credit report?
It is typically removed seven years from the filing date.
Should discharged debts show a balance?
No. Debts discharged in bankruptcy should show a $0 balance and be marked as included or discharged in bankruptcy.
Can I get a credit card after bankruptcy?
Yes. Secured credit cards are often available soon after discharge and are a good way to start rebuilding.