When people are deciding whether or not to file for bankruptcy one of their main considerations is the question of how long a bankruptcy will affect their credit report. Under the Fair Credit Reporting Act (FCRA), information included in your credit report can stay for seven years. However, there are exceptions……
-information about criminal convictions can be reported without time limits
-bankruptcy information can be on your record for 10 years
-information reported in response to an application for a job with a salary of more than $75,000 has no time limit
-Information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit
-information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations run out, whichever is longer.
Thus bankruptcy filers can have negative information on their credit report for 10 years. However, in Chapter 13 cases, some creditors do leave the negative information for only 7 years in order to encourage people to pay part of their debts under Chapter 13 rather than having all their debts discharged in a Chapter 7 filing.
One’s credit report, of course, is an important consideration as almost all of us use credit to purchase our house or our cars while many of us use credit cards for everyday purchases. However, it oftentimes gets more consideration than it should.
Even after a bankruptcy filing most people can just build up their credit again. Of course, if one is unemployed and has no means of income, it will be impossible to get new credit regardless. For most people who are gainfully employed and with a capacity to pay, it will not be hard to get credit even with a bankruptcy filing on their record.. They may not get the best interest rates or they may otherwise just be able to open limited amounts of credit. However, in due time credit records can be built up again. After all, many of us immigrants had no credit record whatsoever when we first arrived in the US. All immigrants went through this path of building up their credit in the US. It is just a matter of doing it again.
(DISCLAIMER: material presented above is intended for informational purposes only. It is not intended as professional advice and should not be construed as such. Rey Tancinco is a partner at Tancinco Law Offices, a professional corporation with offices in San Francisco, Vallejo, and Manila. The law office website is at: tancinco.weareph.com/old. Rey Tancinco can be contacted at (800) 999-9096 or (415) 397-0808 or via email at: attyrey@tancinco.com
