How Long Will a Bankruptcy Stay On My Credit Report?

Written by Timothy Czekaj

For most people, bankruptcy provides an opportunity to eliminate or reorganize debt. Depending on the type of bankruptcy you file for, you can wipe out your debts completely or pay them back over three to five years. Unfortunately, since bankruptcy involves forgoing or altering how debts are repaid, this process can also negatively impact your credit report.

If you have decided to start over with your finances, the bankruptcy attorney at Czekaj Law, LLC can help. With years of experience in the legal system, they can ensure you are not taken advantage of.

To find out how you can regain control of your finances, call (717) 275-9770 for a confidential consultation.

Chapter 7 vs Chapter 13 Bankruptcy: Which Option Is Right for You?

Choosing between Chapter 7 and Chapter 13 bankruptcy depends on your financial situation, income, and goals. Both types have advantages but are designed for different circumstances.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is often described as a “liquidation” where you may expect to sell off assets to repay creditors, but many people who file a Chapter 7 will not have to sell anything at all.

If you decide to go with this option, a trustee will be assigned to your case, one who will oversee your case to ensure that assets do not exceed the exemption for the particular asset. As long as your assets are within the allotted exemptions, you can eliminate your unsecured debt without having to get rid of any personal property.

How to Qualify for Chapter 7 Bankruptcy

To qualify for Chapter 7 bankruptcy, your disposable income must be minimal. This route is ideal if you have a “normal” amount of assets and you want your debts to be eliminated.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, otherwise known as reorganization bankruptcy or “payment plan”, is for those who have the means to pay back some or all their financial debt, or who want to protect a secured asset that has fallen behind on payments.

Chapter 13 bankruptcy involves paying back at least a portion of what you owe in monthly installments. In exchange, you may be able to keep all of your property; you will not have to give up your most prized possessions, such as your car or home.

How Bankruptcy Affects Your Credit

If you declare bankruptcy, the major credit bureaus will be informed. As a result, you will have negative marks on your credit report for the foreseeable future. It will be challenging to secure financing for a major purchase, and you may be denied employment opportunities, such as positions with financial responsibilities.

Chapter 7 Credit Impact

• Remains on your credit report for up to 10 years.
• Can make it more difficult to obtain financing for large purchases.
• May affect employment opportunities in financial roles.

Chapter 13 Credit Impact

• Typically stays on your credit report for 7 years.
• Involves repayment of some debts, which is viewed more favorably by creditors.
• Offers an opportunity to rebuild credit more quickly once debts are managed.

Over time, the negative marks fade, and achieving a fresh start can improve your financial outlook faster than continuing to struggle with mounting debt.

Why You Should Seek Help From a Bankruptcy Attorney

An experienced bankruptcy attorney can give you crucial legal advice for your situation. For example, they can inform you about what to expect during the process or which type of bankruptcy would be most suitable for your situation. They can also make everything easier for you by handling the complicated paperwork involved, and they can help you achieve your financial goals in the process.

A lawyer can also absorb the many stressful situations that come with filing for bankruptcy. Your legal representation can handle calls from creditors and court-appointed trustees that would typically go to you. Overall, they can ensure that you are not taken advantage of.

Take the First Step Toward Financial Freedom

If you are considering filing for bankruptcy, you need the help of someone who has worked in your area. The bankruptcy attorney at Czekaj Law, LLC has spent much of their career helping people in Juniata County, Perry County, and the rest of central Pennsylvania. They understand the legal processes involved and can handle the technical aspects, ensuring you experience minimal stress.

If you have questions about your case or are ready to take action, call (717) 275-9770 today to work with an experienced bankruptcy lawyer in central Pennsylvania.