Will My Chapter 7 Bankruptcy Fall Off My Credit Report?
For many consumers, getting a fresh start and putting past financial obligations behind them can be achieved by filing for Chapter 7 bankruptcy. Many people get so over their heads in debt that this is the only way to get out. In order to do so, they will need to work on their credit score by taking the right steps. This includes keeping all credit card balances low and paying off bills on time or even before the due date. However, it is important to realize that filing for Chapter 7 bankruptcy won’t just magically repair a credit issue overnight. It can take ten years for a bankruptcy to disappear from a credit report, depending on the exact bankruptcy chapter that was filed by a qualified attorney. Upon successfully completing your Chapter 7 bankruptcy process, our firm is happy to provide credit repair as a service to help expedite the process.
Understanding Your Credit Report
Many people are very surprised at the types of personal data a report contains. To be specific, you can expect to see these three different kinds of information:
•Personal information- Your report will contain all of your past addresses, as well as your current address. It will also show a list of past and present employers.
•Accounts- Your report will contain all of your credit accounts, as well as your past payment history. It will show which accounts have been paid and which have been marked as a “charge off.”
•Public records- You’ll see any past bankruptcies, tax liens, and judgments on your report.
Credit Reports and Bankruptcy Reporting
Many people already know the general rule of thumb when it comes to past debt. Normally, charge offs and slow payments typically disappear from reports after seven years. However, it is a different situation when you file for bankruptcy and will depend on the type of chapter that you file.
Chapter 7 bankruptcy- Anyone who files for Chapter 7 bankruptcy will have this on their credit report for about ten years. After the ten years are up, all credit bureaus should cease to report on the bankruptcy.
Chapter 13 bankruptcy- When you file for this type of bankruptcy, you will be required to follow a repayment plan for up to five years. This will stay on a credit report for seven years, beginning from the date it was filed. This type of filing encourages you to pay off your creditors but offers an easier solution to do so.
How a bankruptcy immediately effects your actual score will depend on the initial score you had when you filed. If you have a higher score when you file, your credit report may be hit somewhat more. It is hard to accurately predict what will happen because these formulas are quite secret. However, if you work hard to pay down your bills and credit cards and are patient, you may find that in two to three years your credit score is much higher than it was before you filed for Chapter 7 bankruptcy.
Is My Credit Report Accurate?
You should always check your credit score from time to time, even when you aren’t thinking about filing for bankruptcy. It is easy and free to check your score when you use these three large credit bureaus- Equifax, Experian, and TransUnion. You are allowed to look at your credit report for free once a year. You can order your own personal report at www.annualcreditreport.com to see for yourself your credit standing.
You’ll want to carefully review all three of these reports, as not every creditor reports back to all of them. Check a few months after you file for bankruptcy to make sure it was noted from each creditor. If it isn’t, you will want to make sure it gets corrected right away. If a potential lender looks at your report and sees a bill that is open but not paid, they may think that you are still the responsible party for it when you are not.
You will also want to check whether your Chapter 7 bankruptcy case has been discharged or dismissed. If it was discharged, this means that all of your qualifying debts were completely erased. A bankruptcy that is successful due to a discharge will mean that future lenders will look at your report differently than if it has been dismissed. Talk to your lawyer if you are unsure of the difference between a discharge and a dismissal. They can provide you with the information that you need.
You will always want to address any potential error you spot as soon as you can. The quicker you get it taken care of, the quicker your credit score can start improving. If you do spot some sort of error and you need to take care of it, the process is pretty simple. You will want to dispute the item, either by sending off a letter to the credit bureau or by speaking to them through the website.
For more information on credit post-chapter 7 bankruptcy, please contact The Offices of Adam C. Gomerman and our team of Long Island bankruptcy lawyers today for a free consultation and guidance.