I am often asked for bankruptcy advice with the question of how long a bankruptcy filing stays on a credit report. Generally speaking, your bankruptcy is going to stay on your credit report for ten years. That is all part of the bankruptcy process. That does not necessarily mean that you’ll never receive credit ever again.
In fact, after a discharge in bankruptcy, many debtors start to receive applications for credit cards, applications for all kinds of credit. Once again, what I want people to understand is – debtors to understand is that just because you file bankruptcy does not mean that you will never receive credit or a loan ever again. Credit, giving credit and giving loans, from a creditor’s perspective, is a case-by-case scenario. They’re going to look at your credit report, sure. They’re going to see your bankruptcy filing that doesn’t necessarily mean they’re not going to give you the credit.
For instance, some creditors look at bankruptcy and your discharge as not something totally bad because they understand that (1) you’ve taken responsibility and discharged your debt that you could not afford at the time, and (2) they know that you cannot receive a discharge in bankruptcy again for another eight years. There are time restrictions as to how often someone can claim bankruptcy. So if you received a discharge in 2011, you cannot receive another discharge until 2019. So the creditor who’s going to be giving you credit knows that if you default on the credit that they lent to you, they can still come after you for eight years, even if you file bankruptcy.
Even if you file for a Chapter 13 bankruptcy and pay back a portion of your debt, you’re still on the hook for whatever is left over if in fact you do file a Chapter 13 before the eight-year period after your discharge; so you would not receive another discharge in Chapter 13. It depends on if your Chapter 13 plan extends over the eight years of the discharge. You should consult with a Chicago bankruptcy lawyer to understand your options. In any event, a creditor sees that and will accept that and say, “Okay, well, we’re going to give this person credit here. Looks like they have a steady job, they’re bringing in good money; they no longer have debt that they’ve been paying back because they received a discharge.” So the credit report is not that huge of a factor in determining a creditor’s ability to give you credit.
We’ve had debtors who have received a discharge and six months later, they get a new car, or six months later they qualify for a loan. It all depends on the debtor’s income and the amount of debt that they have at the time the creditor extends credit. So if people are worried about never receiving any kind of credit after a discharge in bankruptcy or they’re worried about their credit report being low because of the bankruptcy, they should not worry too much because, once again, creditors will extend credit to people who claim bankruptcy. Many of them do. Many of them don’t think that bankruptcy is an issue because they realize that you could not get another discharge in eight years.
So do not worry that filing bankruptcy will ruin your credit for life. It is not something that debtors should be afraid of. There are many ways to improve your credit report and your credit score after receiving a discharge in bankruptcy. Our firm, has a small, easy-to-read book that we give to our debtors for free, and it is a very easy-to-read book about rebuilding your credit for after you’ve received a discharge in bankruptcy. Over the past 20 years, we have helped thousands in the filing of Texas bankruptcy cases. You can rest assured that your case will be handled in the most professional manner available. That is how we have built our reputation and that is how we continue to assist individuals and businesses throughout the area. Legal Advice