It wasn’t supposed to be this way. Never in a million years would you have imagined that you’d end up in bankruptcy court.
A few years ago, you landed your dream job. And thanks to the major increase in pay, you were able to buy a posh home in the suburbs. You also purchased an SUV and took your significant other on an extended vacation abroad.
Then out of the blue, your company decided to downsize to cut their losses. But you weren’t in total panic mode right away, and for a valid reason. As a manager and top performer in the company, you were confident your job was secure. Too bad the CEO decided to do away with your entire department. Ouch!
To make matters worse, you were the sole provider for your household. Your spouse stayed at home to care for your young son. Plus, the household debt load was astronomical. And you’d never paid much attention until now that the money well had run dry.
Fast forward a year and you’re still without work. With no other options left, you decide to file for bankruptcy. Down the drain goes your credit score, but for how long? And when you can you get the negative information removed from your credit report?
How Bankruptcies End Up On Your Credit Report
The courts do not report information about bankruptcy proceedings to the credit bureaus. Credit reporting agencies do! Here’s how it works:
- You file for bankruptcy and head to court.
- The court includes information from the bankruptcy filing in the public records database.
- Credit reporting agencies get information about each account included in the
- bankruptcy filing from the public records listing.
- The bankruptcy filing is listed in the public records section of your credit report.
- The accounts included in the filing are notated on your credit report as “included in bankruptcy.”
How Long Will The Negative Information Remain On Your Credit Report?
According to the Fair Credit Reporting Act, bankruptcies can be reported on your credit profile for up to 10 years from the filing date. On the other hand, the accounts that were included in the initial filing will only remain for seven years from the date of last activity. This means it is possible that the public record could still haunt you (and your credit score) for a few years after the discharged collection accounts fall off your credit report.