How Long Does Chapter 13 Stay on Record?

By T.L. Chancellor

Chapter 13 bankruptcy is used mostly by consumers to discharge debts they can no longer pay, typically due to such hardships as unemployment or medical bills. In a Chapter 13 bankruptcy, a debtor is obligated to pay back a portion of the debt through a payment plan administered by a U.S. bankruptcy trustee. The fact is any bankruptcy becomes a part of that debtor's record for about a decade.

Basic Timeline

According to the Fair Credit Reporting Act, a credit bureau has the right to list a bankruptcy on a consumer's credit report for up to 10 years. This is longer than other negative information, such as lawsuits or judgments against you, which can remain on your credit report for up to seven years. The amount of time a bankruptcy remains on a credit report depends on the type of bankruptcy and whether the case was properly dismissed.

Keeping Up With Your Credit

Moneybluebook.com, a source that features information about credit reporting agencies, says that credit reporting agencies are obligated to keep accurate records on all consumers. They collect information from public records and those that lend credit. However, they recommend that all people check their credit at least once a year to make sure their reports are accurate.

Reporting Period

While the FCRA stipulates that a bankruptcy should remain on a credit report for 10 years, the rule of thumb for Chapter 13 is that the bankruptcy remains on the report for seven years. According to Moneybluebook.com, this is done to encourage those debtors to pay back part of their debt. It should be noted that a Chapter 13 repayment plan typically takes three to five years if approved by a trustee. If the payment plan is successfully completed, then the bankruptcy is discharged.

Note Your Filing Date

Moneybluebook.com says one of the biggest misconceptions about the timeline for Chapter 13 bankruptcy remaining on a credit report is that the clock starts when the bankruptcy is discharged, which is when the payment plan is complete. That would entail a 12-year time line. The clock for Chapter 13 actually begins the day you file your paperwork with the court.

If You're Not Successful

Not every debtor successfully completes a Chapter 13 payment plan. In the event that the case is dismissed--usually because the debtor cannot make the payment--the dismissal of the case is required to be reported on your credit report. Moreover, the original filing will remain on the credit report for an unspecified amount of time.

How It's Listed

There are three major credit reporting agencies---Experian, TransUnion and Equifax. According to Moneybluebook.com's research, Equifax reports dismissed Chapter 13 cases for 10 years, but discharged Chapter 13 cases for seven years. TransUnion and Experian report both dismissed and discharged Chapter 13 cases for seven years.

About the Author

T.L Chancellor has more than 12 years of newspaper reporting and editing experience. She has written extensively about education, business and city government. She has also worked at a public relations firm, focusing on environmental issues with clients.