The two main types of personal bankruptcy are Chapter 13 and Chapter 7. When you file for Chapter 13, you negotiate with your lenders to come up with a payment plan you can afford. None of your debt is erased -- it's simply restructured. When you file for Chapter 7, some (or all) of your debt is dismissed. In both cases, nothing is erased from your credit report.
Credit Reports
A credit report is a record of your borrowing and payment activity from the past seven years. It tells potential lenders how creditworthy you are. Every time you apply for credit, the lender will run a credit check to decide whether to lend to you and how much interest to charge. If you have a good, long-established credit history, you will find it easy to borrow money. If your credit history is less than perfect, you will find it difficult and expensive to get credit.
What Is in Your Credit Report
Your credit report contains all your credit accounts from the last seven years, both active accounts and ones that you've closes. This includes mortgages, personal loans, car leases, credit cards, store cards and other forms of debt. If you have medical debt that has been passed onto a collection agency, it will be in there, too. If a court ruled against you in a financial matter, it will be on the report. So will any liens on your house. Every credit report has the person's identifying information, including current and previous addresses, Social Security number, date of birth and driver's license number.
What Is Not in Your Credit Report
As the name says, a credit report is a record of credit given to you by lenders. Savings accounts and pension plans do not appear on your credit report. Nor do checking accounts, unless you've maxed out an overdraft and are in debt to the bank. There is no mention of your salary or other forms of income, though creditors will look at that, as well as at your credit report, when deciding whether to lend you money. If you have a criminal record, it won't be on your credit report, either.
Bankruptcy and Credit Reports
When you file for bankruptcy, nothing falls off your credit report. On the contrary, a record of you having filed for bankruptcy is added to your credit history. Chapter 13 bankruptcy will stay on your credit report for seven years, the same as other types of negative information. Chapter 7 is more serious. It will stay on your credit report for 10 years. It's impossible to get it removed before it expires, unless it's on there as a mistake. Bankruptcy will severely hurt your credit score for as long as it's on the report. However, if you stay out of debt, it will matter less as years go by.
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