How Long Does a Chapter 7 Bankruptcy Stay on My Credit Report?

When the economy is on a downslide and people are losing their jobs sometimes tough decisions have to be made. This is the situation that we are faced with today. People are losing their jobs at an alarming rate. Unemployment is at an all time high. Without a job some bills will have to go unpaid. Families are trimming expenses everywhere they can and some are willing to accept part time jobs even if it won't cover their monthly expenses. When you have exhausted all of your resources you may be faced with the reality that you have to file a petition for a chapter 7 bankruptcy filing.

When you file a chapter 7 bankruptcy an automatic stay goes into effect. A stay means that all creditors are prohibited from contacting you for further collection activity. They cannot send letters', make phone calls, and all legal action has to stop.

Once you have filed a petition for bankruptcy this will remain on your credit file for approximately 10 years from the date of filing. If you have any property or assets that you want to keep such as an automobile you must sign a reaffirmation agreement which establishes a new contractual agreement.

It will probably be some time before you can re-establish credit but it probably won't take 10 years. Once you are approved for a credit card you will probably receive a very high interest rate or you could be approved for a secured credit card which also carries a high rate of interest.

A chapter 7 can lower your credit score. Some creditors will not extend you credit after a bankruptcy filing even if the filing was 5 or 6 years ago. Any need credit has to have payments made on time before you are starting to re-establish your credit history. If payments are late it will portray you in a negative light and it will almost put you back to square one. Once you have new credit this is your chance, for the most part to put the past behind you. Only file bankruptcy as your last option. Sometimes you can work out a plan of action with consumer credit counselors or you may even be able to contact your creditors on your own and make new arrangements. Most creditors will be willing to work with you and some will even be willing to accept a cash settlement.