How Long Does Bankruptcy Stay On Credit Report (And Why)?

Exact Answer: After 7 to 10 years

When a certain organization is not able to honor or pay off the financial obligations or is not able to pay back to its credit lenders, then without any option left it files for bankruptcy. A petition is being filed in the court for the issue of bankruptcy where all the unpaid debts of that company get calculated and made to be paid back. If found an incomplete payment then it will be from the company’s assets or shares.

So the most important consequence among others is the impact that bankruptcy can be its effect on your credit score. The bankruptcy would remain on the credit score report for at least 7 to 10 years. And apart from that, the people who have taken up all their remaining options and are not anymore able to get another job or can increase their income are faced with fewer choices left.

How Long Does Bankruptcy Stay On Credit Report

How Long Does Bankruptcy Stay On Credit Report? 

Bankruptcy Types Periods
Liquidation Bankruptcy    10 years
Wage Earner Bankruptcy 7 years

So coming to know about bankruptcy, we also knew that how critical it is. This is because bankruptcy is a type of debt trap. And once you get into this trap it will crush you in it, till everything will get out of your hands.

As we know further about bankruptcy we come to know that, bankruptcy is a legal course that is undertaken by the company to make free itself from debt obligations. Especially debts which are not being paid to the credit lenders completely are forgiven by the owners. Apart from that bankruptcy filling vary from country to country.

So in the USA, 2 main chapters are basing on the concept of Bankruptcy and its adverse effects on the Credit report. These chapters are 7 and 13. So as we came to studying this chapter 7 of the United States bankruptcy law. This chapter is also liquidation bankruptcy. Harrison refers the chapter 7 as straight bankruptcy.


This is because it is always usual and found in the case of consumer bankruptcy. It takes four to seven months to get over. Apart from that, those who stand to file a suit in chapter 7 of the bankruptcy law, no more owe to pay back any of those unsecured debts. These debts are like personal loans, medical expenses, and credit cards. But other than that, they can if they want to sell some of their own shares or liquid assets to square off the secured loans. And this Chapter 7 of the Bankruptcy Law makes sure to stay on your credit score reports for 10years from the exact date it got filled.

Chapter 13 of the United States Bankruptcy Laws mainly deals with the bankruptcy of the wage earners, by virtue of which the consumer can get a stay of 7 years on its credit report.

Why Does Bankruptcy Stay So Long On Credit Report?

So before proceeding further into the topic, it’s quite important to know that all the statements made about this topic are based upon thorough research on the topic and result of mere assumptions.

And with that, we got that how long the bankruptcy will stay on the credit report.
Now coming to the point, after knowing all this again another question will pop up on your mind that is, why will it take this long. This is because making a point on a matter of relevancy is always fair. So the reasons behind this question will be answered below.

When a person or any organization files for the 7th chapter of the United States law of bankruptcy, in which they do the liquidation of their current assets just to repay their allotted debts. After all that if a suit is being filed in chapter 7 of the bankruptcy laws it implies that all the efforts from all the current credit lenders must be stopped at one go. And this result affects the credit report by staying over it for long 10 years. And this thing can be much harmful.

Credit Report

After that, the next chapter that is the 13th chapter of the United States Bankruptcy law States that the individual shall attempt to reconstruct all their resources or the other cash flows. All this is to pay off the remaining debts. The person can file a suit for chapter 13 but other than them, the corporations and partnership firms can’t. So these are the reasons behind all these long stays.


So from the above discussion, it must be clear that what bankruptcy means and how it works on. It would not be wrong to say that it is a hectic process. This because it makes a person lie trapped in debt.

Apart from that, in countries like the United States, it’s too much difficult to come out of bankruptcy. As already it will stay there in your credit report making it more ugly to start anything for at least 7 to 10 years. Well other than that it is a great legal course, protecting the economy from these viruses!



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Hi! I'm Nidhi.

Here at the EHL, it's all about delicious, easy recipes for casual entertaining. So come and join me at the beach, relax and enjoy the food.


  1. This article provides a thorough explanation of the impact bankruptcy can have on credit scores. It’s essential to understand these consequences before filing for bankruptcy.

    1. I completely agree, Riley. It’s crucial to consider all factors before making such a significant financial decision.

  2. This article has shed light on the severity of the bankruptcy process and its implications for credit scores. It’s essential to recognize the long-term effects before considering bankruptcy as an option.

  3. The thorough analysis of the adverse effects of bankruptcy on credit reports sheds light on the complexities and lasting implications of bankruptcy filings. This information is valuable for anyone navigating financial difficulties.

  4. The meticulous breakdown of the legal aspects of bankruptcy and its effects on credit reports is both informative and thought-provoking. It’s evident that bankruptcy significantly impacts financial stability.

  5. The article has effectively highlighted the prolonged duration of bankruptcy on credit reports and its underlying reasons. It’s crucial for individuals to comprehend the lasting consequences of bankruptcy filings.

  6. Bankruptcy appears to have long-term repercussions on credit scores, with different time periods depending on the type of bankruptcy filed. This information is alarming but necessary to know.

    1. Yes, it’s quite concerning, Julie. Understanding the gravity of bankruptcy on credit scores is essential for anyone dealing with financial difficulties.

    2. It’s definitely a wake-up call to be aware of the long-term effects of bankruptcy on credit reports. This article has provided valuable insights.

  7. The detailed examination of the impact of bankruptcy on credit report duration is both informative and thought-provoking. It’s clear that bankruptcy has significant and lasting consequences on financial stability.

  8. The detailed explanation of the different chapters of bankruptcy law and their impact on credit reports is enlightening. It’s clear that bankruptcy is a complex process with lasting consequences.

    1. I couldn’t agree more, Tknight. It’s evident that bankruptcy has far-reaching effects and should not be taken lightly.

  9. The information on the duration of bankruptcy staying on credit reports is quite sobering. It’s crucial for individuals to understand the lasting impact of filing for bankruptcy.

  10. The in-depth explanations of chapter 7 and 13 bankruptcy laws and their impact on credit report duration are eye-opening. It’s essential to be well-informed about these legal processes.

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