Bankruptcy does not impact credit scores forever

On Behalf of | Jan 4, 2021 | personal bankruptcy |

Many people who file for bankruptcy have a plethora of questions regarding how it will affect them in the future. A common one is how long bankruptcy will last on their credit report. 

Credit bureaus only report bankruptcies for a certain amount of time. People who file for bankruptcy are still eligible for automobile and home loans in the future with careful planning and mindful spending. 

How long the credit report shows the bankruptcy 

The length of time that bankruptcy is reportable depends on the type that someone files originally. According to, a Chapter 13 bankruptcy is reportable for seven years following a bankruptcy, while a Chapter 7 is reportable for 10 years. 

There are quite a few differences between the two types of bankruptcy. One of the major distinctions is that filers must at least partially repay their debts under Chapter 13. 

What it takes to rebuild credit after bankruptcy

People who file for bankruptcy will still be eligible for certain types of credit soon afterward. The trick is to forgo old habits and learn to rebuild the credit score by using credit wisely. The Federal Trade Commission website states that people filing for bankruptcy must receive credit counseling from a government-approved source. This counseling can help people struggling with unmanageable debt learn how to use credit effectively and avoid additional bankruptcies in the future. 

While bankruptcy is generally a stressful time for people who must utilize the process, it does not impact their credit scores forever. Using credit wisely and waiting for the statute of limitation to pass are both keys to obtaining favorable credit terms in the future. 

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