HOW LONG DOES A BANKRUPTCY FILING STAY ON THE CREDIT REPORT

A common question that prospective clients ask is how long does the filing of a bankruptcy remain on your credit report.  The reporting can only remain on your credit report for a maximum period of 10 years.   This period begins to run from the date of filing and not from the date of discharge.   This requirement is part of the United States Code of Laws and is found under 11 U.S.C. section 1681 subsection c and cannot be changed by business interest.

You may be concerned that 10 years is a long time, but, bad credit remains on your credit report for 7 years.  If you have been trying to work your way out of debt for three or more years,  then your credit could have been fixed quicker by filing for bankruptcy when the financial problems first arose than trying work through your credit issues when there was no hope of working out your financial problems.

Whether you have bad credit or have filed bankruptcy, how do you determine which one is better for you?  The fact is that bad credit often has a worse effect on getting credit than a bankruptcy.   There are several reasons for this, but, the explanation lies in uncertainty.

When you file bankruptcy and obtain your discharge, there is no longer a threat to a new creditor that you will take money you would normally pay to the new creditor and pay it to an old creditor who is hollering for payment.

Even worse is when a creditor sues and obtains a judgment.  A judgment is good in South Carolina for 10 years from the date the judgment was entered in the records at the county courthouse.   If you have tried to pay for several years and then the lawsuit is filed, it may be 2 more years before the judgment is entered in the record.  When a delay occurs such as this, the debt is a problem for 14 years.

I often ask potential debtors who do not want to file bankruptcy? What and how they hope to achieve  by not filing?  The debtors seldom have any answers and are just hoping that things will get better.  If your income is not strong enough now to make all the payments due, you are probably not going to make enough money in the future.

Creditors are always guilty of piling on once you run into financial problems.  Late charges, higher interest rates, over limit fees will cause the balance owed to go up much faster than anyone can expect pay raises to help them out.   Look at your situation honestly.  If there is nothing that is going to help you work out your debt that you can see now, it probably is not coming.  “Tomorrow” is a beautiful song from the Broadway plan “Annie”.

Do not base your future on things that will simply not happen.

 

About Nathan Davis, Esquire

Born in Charleston, South Carolina, Nathan Davis has been practicing law for many years. Mr. Davis has a wide variety of experiences having practiced domestic relations, criminal law, social security law having also practiced collection law in the past. This knowledge is helpful when someone needs to restart their financial life. The practice is now primarily bankruptcy and debtor representation work, but, Mr. Davis continues to also practice real estate law, trusts and estates and a general litigation practice. I believe that the most important part of representation is trying to leave you better off when the case is finished than when you started. Although I will do as my client directs, I will always tell you if I think that you are making a mistake. Bankruptcy is about a "fresh start". If you do not make changes in what you are doing, you will be doing what you are doing now in the future. There is no shame in bankruptcy or other steps that you may take to start your life over. Too often, people worry more about things than about themselves, their family or their future.
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