You don’t need me to tell you that the economy is in bad shape. People are losing their jobs and homes, leaving many little choice but to declare bankruptcy. One Yahoo! Answers community member asked how long a bankruptcy stays on someone’s credit report. Is there a hard and fast rule, or does it depend on a million different factors?
I hunted around the Web and found that, amazingly, there actually are solid numbers for how long a bankruptcy stays on a credit report. According to credit bureau Experian, the bankruptcy “remains for either 7 years from the filing date if it was a Chapter 13, or 10 years from the filing date if it was a Chapter 7, 11 or 12.”
So what makes a Chapter 13 different? The official site of the Federal Judiciary explains that Chapter 13 bankruptcy “allows a debtor to keep property and pay debts.” Chapter 7, on the other hand, is more akin to liquidation of all assets. Again, according to the Federal Judiciary, “Chapter 13 offers individuals an opportunity to save their homes from foreclosure.”
Regardless of your current financial status, it is important to monitor your own credit. A few years ago, the U.S. government started encouraging citizens to check their credit every year for free. With identity theft and fraud a growing issue, keeping tabs on your own credit can help stop problems before they start (or at least before they get out of control).
For more information on the various types of bankruptcy, check out this link from the U.S. government. But keep in mind that online help “should not substitute for the advice of competent legal counsel or a financial expert.” Bankruptcy law is an extremely complicated (and boring) topic. If you’re worried, do yourself a favor and speak to an expert.
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