How long will a bankruptcy be on my credit report?

10 years.

As an Asheville bankruptcy lawyer, this may be the most common question I’m asked. The answer is simple. The reality is a little more complex. When you receive a bankruptcy discharge each creditor that you owed money to must report the debt differently. Specifically, each of your creditors must mark the debt amount as $0 and state that it has been discharged in bankruptcy. This designation can be listed on your credit report for up to 10 years. Of course, a creditor doesn’t have to list it on your credit report for that long. But, it cannot list it longer, nor can it assert that you still owe money.

Credit is important and you’ll want to re-establish your credit after filing bankruptcy. Each person’s situation is unique so it’s impossible to state how long a bankruptcy filing will impact your credit standing. I generally recommend that people check their credit reports from each of the 3 credit reporting agencies- Equifax, Transunion, and Experian- about 6 months after filing. Each discharged debt should state that there is a $0 balance. If the report is incorrect, then I advise people to dispute it. Fortunately, each of the credit reporting agencies have a fairly straightforward procedure for disputing incorrect reports.

Once your credit reports are correct then I suggest getting a credit card. “What?!?!” is a common response to this advice: “My bankruptcy lawyer is telling me to get a credit card?!” Yes, because credit is important in our society and the only way to rebuild credit is to have credit, I strongly recommend that my bankruptcy clients get a small- sometimes secured- credit card and use it to buy gas, groceries, and other typical necessities. I also recommend that my clients pay this card off in full each month. This, combined with paying utilities on time, repaying reaffirmed debts such as car payments, and maintaining steady income (if possible) will help rebuild credit.

Before the “Great Recession” I could confidently tell most of my clients that, if they worked to rebuild their credit and maintained employment, they could most likely qualify for a mortgage 1-3 years post bankruptcy. In today’s recessionary climate things are not the same. It seems like no one is getting a mortgage! However, based on my clients’ experience, I can say that most people are able to rebuild their credit within 3-5 years of bankruptcy. Most are able to finance vehicles, obtain student loans, and even get mortgages (assuming that they are able to save 20% of the price as a down payment.)

Call me if you have questions about your credit. I am a bankruptcy specialist in WNC and would enjoy speaking with you:

Here are links to the 3 credit reporting agencies: