Will Filing for Bankruptcy Protection Permanently Affect Your Credit?

How Long Will a Bankruptcy Affect Your Credit? Will It Ever Drop Off Your Credit Report?

For many, one of the biggest fears associated with bankruptcy is the perception that it will permanently destroy your credit, that you’ll never be able to get a loan or credit card again. Is there any truth to that concern? What happens to your credit when you file a Chapter 7 or Chapter 13? Will the bankruptcy ever disappear from your credit report?

The Types of Information that Appear on a Credit Report

The credit reporting agencies generally gather and publish three types of information:

• A list of financial accounts in your name, as well as a history of your payment record for those accounts
• A list of certain public records, including bankruptcy filings, judgments and tax liens
• Names and addresses for you and your current and former employers

What Happens to Your Credit When You File for Bankruptcy Protection?

A Chapter 7 or Chapter 13 bankruptcy petition will become a part of your credit report. In the period immediately following the bankruptcy filing, your credit score will drop significantly.However, if you honor your financial commitments after the bankruptcy filing, you’ll start to amass a record of timely payments, which will start to push your credit score back up. If you filed a Chapter 7, the bankruptcy will typically stay on your credit report for up to 10 years. With a Chapter 13, it only stays there for seven years.

Will You Be Able to Get Credit if the Bankruptcy is Still on Your Credit Report?

As a general rule, creditors are more interested in what you’ve done lately. While some potential creditors will only look at your score and will simply reject your application if it’s too low, others will consider your recent credit history. If you have a significant period of time where you’ve consistently honored your financial commitments, they may be willing to work with you.

Contact Attorney Howard N. Sobel

At the office of Howard N. Sobel, we provide personal bankruptcy counsel to men and women throughout the state of New Jersey. Contact our office online or call us at 856-424-6400 to set up a free initial consultation. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.

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