Can a Discharged Chapter 7 Bankruptcy Affect Your Credit Score?

  • Bankruptcy

Can a Discharged Chapter 7 Bankruptcy Affect Your Credit Score?

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Bankruptcy becomes public record and finds mention on your credit report, even after the discharge. In case of a Chapter 7 bankruptcy, since no loans are paid back, it is mentioned on your credit report for a duration of 10 years from the date of the bankruptcy filing. According to Dallas based bankruptcy law firm Recovery Law Group, when the bankruptcy filing is discharged, the credit report should be updated to show the status. This discharge status should be extended to include all accounts included in bankruptcy. The update should also be done by the lenders to show that zero balance is owed by the debtor.

People who file for bankruptcy should request for a free credit report a couple of months after their bankruptcy discharge to ensure that the same is reflected on all accounts included in bankruptcy. Though you are no longer responsible for paying debts already discharged, yet their mention on your credit report despite being discharged adversely affects your credit ratings.

The duration for which accounts remain on your account depends on the delinquency date of those accounts. Generally, the accounts are removed seven years from the original delinquency date irrespective of being included in bankruptcy. In case they were current prior to the bankruptcy filing, they will remain for seven years from the date of the bankruptcy filing.

To get over bankruptcy, you need to start making amends. Re-establishing credit can take time, but with steady efforts, the effect of delinquent accounts and other bankruptcy notations gets reduced. After a fixed duration, the accounts included in the bankruptcy as well as your bankruptcy will be removed from your credit report. To know more about your options in case of financial distress, call 888-297-6023 to schedule an appointment with bankruptcy lawyers.