Good Lawyers Helping Good People Through Tough Times

11900 West 87th Street Parkway, Suite 125, Lenexa KS, 66215

Credit After Bankruptcy


A common question people ask their bankruptcy attorney when considering bankruptcy is, "how will bankruptcy affect my credit report?" A bankruptcy filing is certainly going to have a negative impact on your credit report; however, if you have already been missing payments and have negative accounts on your report, your credit report is already hurting you.

A bankruptcy will remove the burdens of most debts and free up money for savings and essential items, so that you do not have to rely on credit. You should benefit immediately from your bankruptcy, when you are not strapped down with excessive debt. You will continue to benefit as more time passes from your bankruptcy filing allowing you to improve your overall credit score.

It is important to remember that nothing on your credit report is permanent!

Bankruptcy and Credit Reports

A bankruptcy case will be reported under the public record section of your credit report. This same section of your credit report is where court cases involving creditor judgments are listed. A bankruptcy case will be reported in the public records section for 7-10 years depending on the bankruptcy case filed.

  • Chapter 13 bankruptcy appears for 7 years
  • The bankruptcy will be deleted from the public records section 7 years from the filing date of the bankruptcy case
  • Chapter 7 bankruptcy appears for 10 years
  • The bankruptcy will be deleted from the public records section 10 years from the filing date of the bankruptcy case
Accounts/Creditors Involved in Bankruptcy

The creditors that are listed in your bankruptcy case and are later discharged in the bankruptcy will still appear on your credit report. These accounts will be marked "Included in Bankruptcy."

  • All delinquent accounts are deleted from your credit report 7 years from the original delinquency date (the date the account first became delinquent and was never current again)
  • Accounts included in the bankruptcy will be deleted after
    7 years from the delinquency date
  • Bankruptcy does not affect the delinquency date
  • Accounts stay on your credit report even if you complete your Chapter 13 Plan
So if you file a Chapter 13, the accounts involved in the bankruptcy will be removed from the credit report after 7 years and the Chapter 13 bankruptcy will be removed from the public records section after 7 years. If your accounts were delinquent before you filed your bankruptcy case, they will fall off your credit report before the bankruptcy.

If you file a Chapter 7, the accounts involved in the bankruptcy will be removed from your credit report after 7 years and the Chapter 7 bankruptcy will be removed from the public records section after 10 years. The accounts involved in the bankruptcy will be removed from your credit report before the actual bankruptcy.

The accounts should be removed from your credit report automatically. It is important for you to continue to review your credit report to ensure accounts are removed and reported accurately.

Negative Accounts and Credit Reports

All delinquent accounts, not just those involved in bankruptcy, are removed from a credit report after 7 years. A negative account can stay on your credit report for 7 years, even if you pay off the amount due. Delinquent accounts include:
  • Car Repossessions
  • Medical Bill Collection Actions
  • Foreclosures
  • Settled Accounts (resulting from a possible short sale, etc.)
  • Charged Off Accounts
  • Collection Accounts
  • Civil Judgments (time runs from filing date)
  • Paid Tax Liens (time runs from date paid)
  • Unpaid tax liens can remain on a credit report for 15 years from the date of filing
Positive Accounts and Credit Reports

Positive accounts remain on your credit report for 10 years. Any positive accounts you had before you filed for bankruptcy will help your overall credit score as time passes.

Rebuild Your Credit Report after Bankruptcy

  1. Establish a Budget and Emergency Fund
    • Try to keep yourself out of the position of needing credit cards
  2. Pay all bills on time
    • This includes: mortgage, car loans, student loans
    • Utilities, rent, and cell phone payments are not reported to the credit bureaus – however pay on time!
    • Prepaid credit cards are not reported to credit reporting agencies
  3. Check your Credit Report to ensure accounts reported correctly
    • This can be time consuming; however, it is very important your credit report is accurate
    • Accounts included in your bankruptcy should not be reported as "open and overdue"
    • Accounts included in bankruptcy should be reported as "included in bankruptcy"
    • If accounts have not been updated:
      • Contact creditor
      • If creditor does not take action dispute with the credit reporting agency (Experian, TransUnion, Equifax)
      • Follow the agencies dispute process either online or by mail – you may have to send in Schedule F from your bankruptcy documents showing the creditor was listed in the bankruptcy
      • The creditor will be responsible to correct the error with all the credit reporting agencies
  4. Don't apply for too much credit at one time
    • Use only a small portion of your available credit
  5. Car loans
    • Car loans will be available shortly after bankruptcy; however, interest rates will be very high
    • Ensure that your car loan does not have a prepayment penalty – so you can refinance your loan later for a lower interest rate
  6. Mortgages
    • In the current economy mortgage lenders are more conservative in their lending practices, which means qualifying for a mortgage within a few years after bankruptcy will be difficult
    • FHA and VA loan programs will extend refinancing and mortgage opportunities to bankruptcy filers 2 years after discharge IF debtors have established perfect credit
    • Start saving now for a down-payment
Bankruptcy is not an option that should be taken lightly; however, if you are struggling to pay your debts and see no way out then you need to speak with our bankruptcy attorneys. Call our office or email to arrange for your free bankruptcy consultation.

Time and wise credit decisions will heal your credit report.