What are the different types of bankruptcies and how do bankruptcies affect my credit score? A bankruptcy will always be considered a very negative event on your credit report. How much of an impact it will have on your score will depend on your entire credit profile. For example, someone that had spotless credit and a very high credit score could expect a huge drop in their score. On the other hand, someone with many negative items already listed on their credit report might only see a modest drop in their score. Another thing to note is that the more accounts included in the bankruptcy filing, the more of an impact on your score. A bankruptcy is considered a very negative event by your credit report regardless of the type. While there are many things to consider when considering filing for bankruptcy, you can expect it to impact your score for as long as the bankruptcy is listed on your credit report. However, as time passes, the negative impact of the bankruptcy will lessen. Here is a brief definition of the most common types of bankruptcy and how long you can expect bankruptcies to remain on your credit report (from the date filed): Chapter 7: basic liquidation for individuals and businesses; can report for up to 10 years. Chapter 11: rehabilitation or reorganization, used primarily by business debtors, but sometimes by individuals with substantial debts and assets; can report for up to 10 years. Chapter 13: rehabilitation with a payment plan for individuals with a regular source of income; once completed/discharged it can report for up to 7 years. Keep in mind that these dates refer to the public record item associated with filing for bankruptcy. All of the individual accounts included in the bankruptcy should dissolve from your credit report after 7 years.
Posted on: Fri, 09 Aug 2013 16:04:47 +0000