How bankruptcy is going to be reported on one’s credit is a common question from clients who are thinking about filing for bankruptcy, or who have already filed. Many clients are concerned about the length of time that a bankruptcy shows up on their credit reports.
However, just because your credit report reflects that you’ve filed for bankruptcy does not mean that you’ll be financially crippled and unable to obtain any new credit until the reporting period expires. While you are involved in a bankruptcy proceeding, not much will happen with your credit reports, and creditors actually don’t have to report anything while your bankruptcy case is pending.
After you receive a discharge in your bankruptcy case, however, it’s a different story. For debt that has been discharged, your accounts should reflect a zero balance. For debts that have been reaffirmed during your bankruptcy (most commonly on vehicle loans), those accounts should indicate that the debt was reaffirmed and that you are current (assuming you are).
The bankruptcy itself will be reflected on your credit report for anywhere between 7 and 10 years from the date of filing. Each credit reporting agency has a different procedure with respect to how long they report a bankruptcy; however, the Fair Credit Reporting Act states that cases filed under both chapter 7 and chapter 13 can be reported for a maximum of ten years from the date of filing.
Whether you’ve been involved in a bankruptcy or not, it’s important to review your credit report regularly to determine that everything’s being reported accurately. The Fair Credit Reporting Act provides relief for those who have attempted to get credit reporting agencies to fix inaccurate information to no avail. If you’ve reviewed your credit report recently and you think something’s amiss, whether it’s related to a bankruptcy or not, see a consumer litigation attorney right away.