How long does bankruptcy stay on your credit report?

There are several types of bankruptcy, but Chapter 7 and Chapter 13 are the two most common types of bankruptcy that individuals struggling with debt can file. Chapter 7 bankruptcy involves selling property to pay back creditors, while Chapter 13 bankruptcy involves repaying debt through a bankruptcy plan. These two chapters may function differently, but they both have long-lasting negative impacts on credit and finances. And both are often considered last resorts.

Key takeaways

• A Chapter 7 bankruptcy may stay on credit reports for up to 10 years from the filing date, while a Chapter 13 bankruptcy generally remains for seven years from the filing date. 
• Even though the impact on credit scores may diminish over time, bankruptcy can continue to affect credit for as long as it’s part of someone’s credit reports. 
• It’s possible to rebuild credit after bankruptcy, but it will take time. 

In most cases, a Chapter 7 bankruptcy can stay on your credit reports for up to 10 years from the date you file bankruptcy. Once the 10-year period ends, the bankruptcy should fall off your credit reports automatically.

A Chapter 7 bankruptcy is sometimes referred to as a liquidation bankruptcy. It happens when a debtor sells or liquidates their nonexempt possessions to pay back their creditors. In turn, they can keep certain exempt assets. After the bankruptcy process ends, the debtor’s remaining debts are discharged. 

The definition of nonexempt and exempt possessions can vary by state, and there are also federal exemptions. Some examples of nonexempt possessions might include vehicles, jewelry or money in your bank account. Exempt assets can include someone’s primary residence, tools for work and Social Security benefits.

In most cases, a Chapter 13 bankruptcy stays on a credit report for up to seven years after the bankruptcy filing date. Once the seven years have passed, the bankruptcy should come off credit reports automatically.

A Chapter 13 bankruptcy is sometimes called a reorganization bankruptcy because debtors can restructure their debts under court supervision and approval. That means individuals work with the court to establish a payment plan to repay creditors. When a payment plan is agreed upon and the bankruptcy is initiated, any foreclosure proceedings stop and the debtor can typically keep their home.

Bankruptcy filings typically appear in the public records section of credit reports.

The three major credit bureaus—Equifax®, Experian® and TransUnion®—don’t have direct contact with bankruptcy courts. And bankruptcy courts don’t directly report or verify information related to bankruptcy cases to the credit bureaus. 

Bankruptcy filings are typically public records. That means information can be reviewed at the courthouse or through a computer system, which credit bureaus can access. Credit bureaus actively collect public records information from courts to keep credit reports up to date.

Although the exact impact can vary, a bankruptcy will generally hurt credit scores. Credit scores help tell creditors the likelihood that borrowers will continue making payments as agreed. Filing for bankruptcy means some debts won’t be repaid or will be repaid with a different payment plan. 

Credit scores aside, creditors and other organizations may review credit reports and consider the bankruptcy filing when making a decision. Individuals who have filed for bankruptcy may have a hard time qualifying for new credit accounts with favorable terms. The bankruptcy could also impact their ability to rent an apartment, open new utility accounts, find a job or qualify for lower insurance premiums. 

The silver lining is that the impact of the bankruptcy will diminish over time, and it’s possible to work on rebuilding credit with responsible credit card use even before the bankruptcy falls off credit reports.

Unless a bankruptcy is on your credit report by mistake, it can’t quickly be removed. If it appears by mistake, you can file a dispute with the credit bureau to have it removed. Otherwise, you have to wait for the credit bureaus to remove the bankruptcy from your credit reports after seven to 10 years, depending on the chapter filed. 

Even when the bankruptcy is discharged—meaning you won’t be liable for that debt anymore—it won’t be removed from credit reports. The status of the bankruptcy will be updated, but it could still take up to seven to 10 years from the bankruptcy filing date for the bankruptcy to be removed from credit reports. 

Late payments and discharged accounts can continue to impact credit scores while they’re part of credit reports. 

While filing for bankruptcy can severely damage credit scores, it’s possible to work on rebuilding credit while waiting for the impact of the bankruptcy to diminish. Here are a few places to start:

It’s a good idea to regularly check and monitor credit reports to ensure they’re accurate. For example, check to make sure all the discharged debts are reported as discharged rather than active. If there are errors, you may need to contact each bureau separately to file disputes.

With CreditWise from Capital One, you can access your TransUnion credit report, whether or not you’re a Capital One cardholder. It’s free, and using it won’t hurt your credit scores.

You can also visit AnnualCreditReport.com to learn how to get free copies of your credit reports from each of the three major credit bureaus.

You may also want to check your credit scores for changes. With CreditWise, you can access your VantageScore® 3.0 credit score.

Don’t be surprised if your scores don’t increase right away. But if you’re patient and practice good credit habits, your scores can improve over time.

A few good credit habits can help your credit history and scores over time. For example, responsible use could include paying bills on time to avoid creditors reporting late payments to the credit bureaus, which can affect your credit scores. Also, use 30% or less of your available credit—as experts recommend—to maintain a low credit utilization ratio.

You might also consider applying for a secured credit card of your own once your bankruptcy is discharged. Using secured cards, such as the Capital One Platinum Secured credit card, responsibly can be a good option for people who are rebuilding credit.

Another option is a credit-builder loan. When you apply for the loan, the funds are set aside in a locked savings account, and you make monthly payments. Your payment history typically is reported to the bureaus, which can help your credit if your payments are on time. The lender turns over the balance when you pay off the loan, and you can use the funds however you want.

Filing bankruptcy is often a last resort, but it could be the right option, depending on someone’s financial situation. Keep in mind that bankruptcy can hurt credit and stay on credit reports for up to seven to 10 years. Wherever you may be on your financial journey, it’s always a good idea to work on improving credit scores.

Want to keep working on your credit? You can explore topics that can help you move the needle with Capital One’s building and rebuilding credit guide.