Every now and then, someone who could really benefit from bankruptcy says that they do not want to file because they’re afraid of having that black mark on their record forever. They worry that they won’t be able to buy a house, lease a car, get a new credit card, etc. Is this a valid concern?
It’s a valid concern, in that the bankruptcy is going to go on your credit report, but worrying about it staying there forever takes things to the extreme. This is never going to happen. Like most things in life, bankruptcy will eventually just be one more thing from your past that has no negative impact on your future.
How long the length of time is that it stays on your record depends on which type of bankruptcy you use. For instance, if you opt for Chapter 13 and set up a repayment plan, it only stays on your credit report for seven years. That’s from the date that it is filed. Since it takes three to five years to pay off the plan, you may get done eliminating your debt and only have the bankruptcy on your record for two more years.
Chapter 7 bankruptcy does last a bit longer, at 10 years. However, since Chapter 7 liquidates your assets to eliminate your debt, you can almost immediately start taking steps to repair your credit and build it back up again.
Understanding the process
You can see how important it is to understand as much as you can about the bankruptcy process. We can help when you need it most.