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Filed for bankruptcy, or thinking of filing, and wondering how long it'll mar your credit report for?

The short answer is that it depends on what type of bankruptcy you filed.

There are two types of bankruptcy for individuals — Chapter 7 and Chapter 13.

How long bankruptcies stay on credit reports
Type of bankruptcy How long it stays on your credit report
Chapter 7 bankruptcy 10 years
Chapter 10 bankruptcy 7 years

Although bankruptcy filings stay on your credit report for up to a decade, the effect on your credit score diminishes over time until it drops off your report completely.

Read on for the different types of bankruptcy, how they impact your credit score and report, plus how you can minimize the impact on your credit report — and what you should do in the aftermath.

Chapter 7 bankruptcy

chapter 7 bankruptcy
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Chapter 7 bankruptcy is the classic bankruptcy measure for people who have defaulted (become unable to pay) their loans. Filling for Chapter 7 forgives most debts, including:

Chapter 7 bankruptcy stays as a negative mark on your credit score for 10 years (from the date of filing). Filings could also cause your credit score to drop by as much as 200 points or more.

Any debts that were wiped away by filing for Chapter 7 bankruptcy will also be included on your credit report.

To qualify for Chapter 7 bankruptcy, you must first pass a “means test” that assesses your income and assets to debt ratio. Often, property, cars and other valuables might be liquidated in order to pay back as much of the debt as possible — but some day-to-day essentials that you own might be exempt under law, like your house or computers you use for work.

Chapter 7 bankruptcy (unfortunately) doesn’t apply to student loans, taxes, criminal fines, alimony or child support — there are some consequences you can't escape.

Chapter 13 bankruptcy

chapter 13 bankruptcy
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Chapter 13 bankruptcy, also known as “wage earner’s bankruptcy,” is for people who earn too much to qualify for Chapter 7, but not enough to meet creditor's immediate payment requirements.

Like with Chapter 7 bankruptcy, filing for Chapter 13 bankruptcy will torpedo your credit score, and the filing will remain on your credit report — for seven years. If you need to apply for another loan during those 7 years, you’ll need to file a motion and obtain the court’s permission first.

Under Chapter 13 bankruptcy, the court creates a payment plan for you to repay your debt over the span of three to five years.

After that span of time, any remaining debts are wiped clean — meaning that your creditors may not get the full amount you owe them. Chapter 13 bankruptcy allows you to repay some of your debt while still holding on to your assets, like cars, jewelry and property.

Can you get bankruptcy off your report faster?

What's interesting is that there's no minimum amount of time for bankruptcy to stay on your credit report. 10 years is only the maximum. So get a free credit score and credit report and look really closely for mistakes.

If you find any mistakes with your personal information, debts, creditors, timelines, file a dispute with the credit bureau. Bankruptcies must be filed correctly and any mistakes mean that the bureau will have to remove it from your report.

If you don't find anything, bad news: you're stuck with it. The good news? Bankruptcies automatically fall off your credit report after the designated amount of time.

If you notice that a bankruptcy doesn't come off your credit report after the expiration date, you should file a dispute with the credit bureaus.

Tips for life after bankruptcy

happy couple smiling while looking at a file
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Double-check your credit report after your debts get discharged. Ensure that only the accounts that were part of your bankruptcy got reported to the credit bureaus. Any mistakes could ding your credit score even more, so they should quickly be reported. You can start by getting your free credit report and credit score from Experian.

Rebuild your credit with a secured credit card but be sure to be cautious when applying for new credit cards — after receiving a discharge, debtors often get offers for new credit cards. If you do opt to sign up for a credit card, look into a secured card as a way for you to slowly rebuild credit.

Budget, budget, budget. It’s one thing if you had to declare bankruptcy for an unforeseen emergency like medical bills or unexpected lay-offs — those things are beyond your control. If you got into debt due to reckless spending, consider having a hard talk with yourself about your spending habits so you can avoid filing for bankruptcy again in the future.

Is bankruptcy worth it?

petition to file bankruptcy form
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There is no shame in needing help to manage your debt, but because of the damage to your credit score, bankruptcy should be a last-ditch resort for those whose debts have run wild and peaked over 50% of their annual income.

If you qualify for Chapter 13 bankruptcy, it is sometimes wise to consult with a debt relief agency to figure out if it's the easier road to take.

Be sure to weigh alternative debt relief strategies like:

  • Debt settlement — where you work with a third party debt settlement company to help negotiate a partial repayment of your debt.
  • Debt consolidation — where you roll all of your debts into one loan with a lower interest rate.

And consider if you might benefit from employing debt snowball or debt avalanche repayment strategies to keep you on track to get debt-free.