The Facts

• A Chapter 13 bankruptcy will be reflected on your credit report as a derogatory entry immediately after you file. It will appear in the section of your credit report that is reserved for public records.
  
  

Time Frame

• A Chapter 13 bankruptcy notation will be reflected in your credit history for seven years from the date that you file. The more recently the bankruptcy occurred, the greater the negative impact it will have on your credit score.
  
  

Considerations

• The effect that a bankruptcy filing will have on your credit score is directly proportional to how good your score was prior to the bankruptcy. The higher your credit score was previously, the more damaging a bankruptcy will be.
  
  

Misconceptions

• Many individuals believe that filing for Chapter 13 bankruptcy will prevent them from qualifying for new credit for a long time. In reality, credit card companies will begin sending you offers for new credit in the mail immediately. The credit card companies know that you cannot file bankruptcy again for a minimum of two years and thus are not a high bankruptcy risk.
  
  

Prevention/Solution

• Actions like paying your bills on time and maintaining a low balance on your credit cards demonstrate good debt management behavior. You can begin rebuilding your credit history immediately by using your debt management skills to construct a record of financial responsibility that future lenders will see on your credit report.
  
  

Warning

• A bankruptcy will follow you even after it has been removed from your credit report. Some credit and loan applications will ask if you have ever filed for bankruptcy. You must admit that you have and this can affect your interest rate. Lying about the bankruptcy is considered fraud.