How Long Does a Chapter 13 Bankruptcy Stay on My Credit Report?

The economy is causing a lot of people to look at a bankruptcy filing as their only alternative. When the income declines people are not able to pay their debts therefore they look for some type of relief. Anyone that files a chapter 13 bankruptcy should still be working. This plan is called the wage earners plan. A program is put to together with the trustee where you pay into the plan. The bankruptcy court trustee will then pay your creditors for you. What's so convenient about a chapter 13 plan is that you normally only have to pay back pennies on the dollar. The plan is normally set up for 36 to 60 months. After you have paid into the plan for this amount of time you should be debt free.

Unfortunately a bankruptcy will stay on your credit file for seven years from the day the bankruptcy is paid in full. After seven years this information should drop off your file. Chances are you may be able to re-establish your credit before 7 years has gone by but it will be costly. Any type of credit card you apply for will have an unusually high interest rate. Sometimes a creditor will give you a secured credit card. A chapter 13 bankruptcy can really lower your credit score. Fortunately as time passes the bankruptcy will have less of an impact on your credit score especially if you have been able to re-establish your credit.

If the bankruptcy has not fallen off your credit report after 7 years has passed you may want to contact the three major credit reporting agencies. Send a letter regarding your concerns and they should be able to get the situation resolved.

A bankruptcy should be filed only as your only alternative. Some of the avenues you can consider is consumer credit counseling. They perform a function similar to the bankruptcy court, which is a debt management plan. You pay them and they disburse the money to your creditors for you. You may want to contact your creditors on your own and many times they will work out some type of repayment arrangement which may fit your budget. If you can pick up another job you may be able to earn enough income to help pay your debts and keep them from falling behind. If you can negotiate lower rates of interest on your credit card debts, this will enable you to get them paid off faster.