How long does bankruptcy stay on your credit report?

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    KikoffKikoff
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    KikoffKikoff
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    Often a last resort, bankruptcy can provide a fresh start, but the consequences are severe.

    Types of Bankruptcy:

    • Chapter 7 Bankruptcy: This type of bankruptcy involves the liquidation of assets to pay off debts. It’s often chosen by individuals with limited income who can’t pay back their debts.
    • Chapter 13 Bankruptcy: This type involves a repayment plan, allowing individuals to pay back all or part of their debts over three to five years.

    Duration on Your Credit Report:

    • Chapter 7 Bankruptcy: Stays on your credit report for 10 years from the date you file.
    • Chapter 13 Bankruptcy: Stays on your credit report for 7 years from the date you file. This is because Chapter 13 involves a repayment plan, showing a willingness to repay debts.

    Impact on Your Credit Score:

    • Initial Impact: Filing for bankruptcy has a severe negative impact on your credit score. Your score can drop significantly, and bankruptcy will be a red flag for lenders.
    • Over Time: The impact of bankruptcy lessens over time. As the bankruptcy ages and you establish a positive payment history, your credit score has a chance to gradually improve.

    Regularly Check Your Credit Report: It’s important to monitor your credit report, especially after filing for bankruptcy. You can get a free report once a year from each of the three major credit bureaus—Equifax, Experian, and TransUnion—at AnnualCreditReport.com.

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