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How long will bankruptcy affect your credit?

When you decide to seek a bankruptcy, you know it will impact your credit. You may worry about when you can qualify for a loan again and when your credit score will begin to rebound. Yet, exactly how long will a bankruptcy affect your credit?

Bankruptcy affecting credit

First, if you seek a Chapter 7 bankruptcy, the bankruptcy will remain on your credit report for 10 years. If you choose a Chapter 13 bankruptcy, the bankruptcy remains on your credit report for seven years. However, with Chapter 7, you can discharge thousands and thousands of dollars of debt quickly. So, your credit score may actually go up when your Chapter bankruptcy is resolved. However, a couple months after your Chapter 7 bankruptcy is complete, you should double check your credit report to ensure your debts have been discharged correctly. Creditors view those who seek Chapter 13 bankruptcies in a better light – because they are repaying their debt over time.

When bankruptcy’s impact begins to fade

Over time, a Chapter 7 or Chapter 13 bankruptcy will impact your credit less. If you are able to make payments for your new debts in full and on time, your credit score can become better, even before the bankruptcy drops off your credit record. You even may be able to raise your credit score to higher than it was before you sought bankruptcy.

Many people delay seeking bankruptcy because they are concerned about how it will affect their credit. Yet, if you feel overwhelmed with debt, going through a bankruptcy might be the best way to get a fresh start and ultimately build a better credit record.

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