Bankruptcy will ruin my credit forever.
I will never be able to purchase anything again.
FALSE.
In truth, a bankruptcy case will be reported under the public record section of your credit report… and you will move on.
This same section of your credit report is where court cases involving creditor judgments are also listed, pulling down your credit score — month after month.
A bankruptcy case will be reported in the public records section for 7-10 years depending on the bankruptcy case filed. However, it is a ONE TIME hit on your Credit Report — the day it is reported.
- 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.
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.)
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. You can obtain a free credit report (at least yearly) from the three major credit reporting agencies here.
There is life after bankruptcy. Car loans will be available shortly after bankruptcy; however, interest rates will be very high. If you take out a loan shortly after your receive a discharge in your bankruptcy case, ensure that your car loan does not have a prepayment penalty – so you can refinance your loan later for a lower interest rate. In the current economy mortgage lenders are more conservative in their lending practice, 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.
Filing a bankruptcy case is a big decision, our Kansas City Bankruptcy Attorneys can provide you with answers during your free, no obligation consultation.