ABA Family Legal Guide

Consumer Bankruptcy

Introduction to Bankruptcy

The Process of Filing for Bankruptcy

A bankruptcy filing could remain on my credit record for up to 12 years. How will that affect my future finances?

Twelve years is the outer limit for all types of bankruptcy. During that time, creditors may deny you credit or charge you significantly higher interest rates. So long as your credit record has unfavorable information, you may have credit problems. This means that you may have trouble renting an apartment, getting a loan to buy a car, or obtaining a mortgage for a house.

On the other hand, bankruptcy may improve your records. Because Chapter 7 provides for a discharge of debts no more than once every eight years, lenders know that a credit applicant who has just emerged from Chapter 7 cannot soon repeat the process.