How Long Does Bankruptcy Stay on Your Credit Report?

The most common forms of personal bankruptcy found on a credit report are chapter 7, chapter 13, and dismissed bankruptcies. Each has its own rules and requirements.

• Chapter 7 bankruptcy: Accounting for 63.1% of nonbusiness bankruptcies between June 30, 2021 and June 30, 2022,² chapter 7 is the most common type of personal bankruptcy. Chapter 7 is an option primarily for individuals with monthly income below their state’s current median or those who can prove that they don’t have enough disposable income to pay their debts, passing what is commonly known as a “means test.” After filing chapter 7 bankruptcy, an individual is usually no longer be liable for large portions of their debt, which is considered “discharged.”³
• Chapter 13 bankruptcy: During that same 2021-2022 period, chapter 13 filings made up 36.8% of nonbusiness bankruptcies.⁴ Chapter 13 can be used by individuals with regular income, who, as of April 2022, have unsecured debt below $465,275 or secured debt below $1,395,875.⁵ Instead of discharging debt, chapter 13 reorganizes it. After filing, debtors are given a three- to five-year repayment plan for at least some of their debt. Chapter 13 lets debtors avoid liquidation of specific assets that aren’t always protected during chapter 7, such as their homes.⁶
• Dismissed bankruptcy: When a chapter 7 or 13 bankruptcy case is dismissed, whether due to a violation of the bankruptcy agreement’s terms, fraud, or a request by the bankruptcy filer, the filer is once again liable for their original debt. The debt is restored and collections resume. Even though the bankruptcy is no longer active, it still appears on the filer’s credit report and can have the same impact on their credit score as a “regular” bankruptcy. That’s one reason why it’s important to meet the terms of a bankruptcy. Otherwise, debtors can be stuck with the credit impact of a bankruptcy and their original debt, plus possible interest and penalties.

It’s important to note that dismissal is very different from discharge. In a discharge, the bankruptcy plan has been completed and creditors cannot pursue further collection. But not all debt can be discharged in a bankruptcy – for example, some student loans, tax debts, and child support usually remain intact – so it’s best to speak with a legal or debt counselor regarding your specific situation before pursuing bankruptcy.

Note that chapter 11 bankruptcy is also a possibility, but it’s far more common among businesses. During that same 2021-2022 period, chapter 11 filings made up only 0.1% of all nonbusiness bankruptcies, compared to 31% of all business bankruptcies.⁷

Unfortunately, there’s not much a person can do to remove a properly reported bankruptcy on their credit report except wait. Chapter 13 bankruptcies typically remain on the debtor’s credit report for seven years, while chapter 7 and dismissed bankruptcies stay for up to 10 years.⁹ Fortunately, good credit behavior, like on-time payments and low credit utilization, can start improving a person’s credit score sooner.

If there are any errors, including bankruptcy data, on your credit report, you can dispute the incorrect information and have it corrected. According to a 2021 Consumer Reports survey of 5,858 people, 34% of individuals found at least one error on their credit report.¹⁰ You can report errors to all three major credit bureaus – Equifax, Experian, and Transunion – online, over the phone, or by mail. You generally need evidence of the error, the correct information, and proof of your identity.