5 ms·

> Many people go through bankruptcy and rebuild their credit over several years. Chapter 13 bankruptcy is deleted from your credit report seven years from the

by bko 5y ago

> Many people go through bankruptcy and rebuild their credit over several years. Chapter 13 bankruptcy is deleted from your credit report seven years from the filing date. Chapter 7 bankruptcy is deleted 10 years from the filing date. This means no one can even tell you were bankrupt after 7-10 years, which is pretty incredible feature for borrowers.

ajross 5y ago
> This means no one can even tell you were bankrupt Except the banks who loaned you money! There aren't that many banks, and credit reports aren't their only source of intelligence. I'm always amazed at the number of people who recommend bankruptcy as, like, an investment or risk management tactic. It's a huge mess, and seven years is a long time.
- bko 5y ago
  > Except the banks who loaned you money! There aren't that many banks, and credit reports aren't their only source of intelligence. I don't think they have that info. It's not like you go take a walk down to your local bank and talk to a loan officer that grew up with you. It's a faceless nameless corporation that does very standard checks. They often don't even hold the debt. Trust me, they want to give you a loan and don't have their shit together enough to get unofficial credit history that they're not legally allowed to use.
  - tedyoung 5y ago
    American Express never forgets. 20+ years after declaring bankruptcy and I'm still not able to get an AmEx card, because they have their own records. (I have an 820+ FICO score.)
    - nobody9999 5y ago
      >American Express never forgets. 20+ years after declaring bankruptcy and I'm still not able to get an AmEx card, because they have their own records. (I have an 820+ FICO score.) I can confirm this. I'm 30+ years out from getting a couple thousand written off by Amex and 20+ years out from bankruptcy (a single "debtor" who was the plaintiff in a lawsuit against me, and during which no loans or credit cards were defaulted on) and American Express still won't do business with me, even after being their employee (and having to pay back every penny that was written off before they'd issue me a corporate card) for several years. I'd also note that American Express does not report payment histories on their charge products to the credit bureaus. But they do have a very long memory. Edit: I'd note that I still had a 700+ credit score within the 10 year window after bankruptcy, and my score is in the mid 800s.
    - nine_k 5y ago
      I suspect Visa, MasterCard, and a number of other banks and credit unions would be keen to offer good loan conditions to a person with a demonstrated income and 800+ FICO score.
      - hkt 5y ago
        I'm not from the US so could you explain how credit unions deal with these things? Are they more sympathetic than banks or do they operate as banks-except-in-name?
        ryathal 5y ago
        For average needs a credit union is a bank with another name. They occasionally have better rates, because there isn't a profit motive for the credit union since it's member owned. If you have special needs beyond checking/savings and home/car loans a credit union may not be able to offer the same level of support as a bank. The quality of credit unions varies wildly, especially on the tech side.
  - deleted 5y ago
    [deleted]
- alisonkisk 5y ago
  7 years is not a long time to live without credit that that a person is shown to be unable to handle. Being bankrupt is great if you are poor.
- conductr 5y ago
  It’s all relative. Seven years of not being able to utilize debt is better than 70 years payoff schedule where every cent of your disposable income is going to service a debt that you’re unable to really put a dent in and making real sacrifices along the way.
  - cconstantine 5y ago
    Creditors love people who have recently filled for bankruptcy. They're vulnerable, known to be bad with money, and can't file again for a number of years.
- rdtwo 5y ago
  Most of the time banks don’t care. They just securitize the product package it into a bunch of complex instruments and sell them off to “investors”
BobbyH 5y ago
I work in the bankruptcy niche, and I wanted to tweak your statements... Chapter 13 bankruptcy is deleted from your credit report seven years from the discharge date, which comes 3 to 5 years after you file (because there's a 3 to 5 year payment plan). So if you measure from the filing date, Chapter 13 takes 7 + 3-to-5 years to come off your credit report, which is 10 to 12 years from the filing date. Similarly, Chapter 7 bankruptcy is deleted 10 years from the discharge date. In a typical Chapter 7 bankruptcy, the debtor receives a discharge 4 months after filing. So your statement is actually quite close, but to be pedantic, it's 10.33 years from the filing date. In my experience, most Chapter 7 filers can fully recover after about 2 years, provided they are able to make their payments on-time after the bankruptcy.
- cconstantine 5y ago
  This is a lie that needs to die. Bankruptcy might get removed from your credit report, but the public court records never do. Anyone who does a credit check can (and will) search those public records. Bankruptcy stays with you forever.
  - throw__away7391 5y ago
    Some friends of mine declared bankruptcy a few years after the financial crisis due to their business failing. They eventually lost their home, but were able to save up some money by not paying their mortgage while their case was in processing). They rented a place for a few years, but after some time, like 2 or 3 years they were able to qualify for a new mortgage with apparently a decent enough rate and bought a house. They were also somehow able to decide which loans to declare bankruptcy on, so they kept their car loan for example. I mean, I don't know that it is perfect, but I think the bankruptcy laws in the US are pretty decent at least.
    - cconstantine 5y ago
      I'm not saying bankruptcy is bad. It's a necessary escape hatch for the credit industry, and shouldn't have the stigma it does. maunder is absolutely right; the consumer credit industry in the US is nothing but predatory. Good for you if you haven't been bit yet, but their goal is to eat everyone. Whenever I see someone brag about their credit score all I see is a mouse begging for the cat's approval. More and more you can't even opt out of consumer credit. I have attempted to opt out of it by not holding any credit, except I apparently need good credit to live somewhere, or a credit card to rent a car or do some kinds of money transfers. Telling people they can file bankruptcy, "reset to 0", and have another chance to redeem themselves is bullshit. The only place it disappears from is your credit report, and implying that covers it is a brazen lie. It really doesn't. Fuck credit scores. What about the ability to get a job, or not live on the street? Having a bankruptcy from 30 years ago can negatively impact your ability to do either of those things. The credit industry is so deluded that they think your credit report is all that matters, and that's how they want you to think. In reality, it's all that matters to them and they can't wait to get you back in the game.
rootusrootus 5y ago
> no one can even tell you were bankrupt For loans over a certain size (definitely anything mortgage size) there is no limit on the length of the credit report given to them. They may not care when it's been so long, but they can see it all.
- actually_a_dog 5y ago
  I'm going to say I don't believe this is true. However, I don't know for sure, and I also don't know the magic words to google to verify or disprove this. Can anybody point me to info on the web, or some of those magic words?
  - rootusrootus 5y ago
    I do not really know exactly how to cite US code correctly, so I will just get you close enough to do a text search: Go here: https://www.law.cornell.edu/uscode/text/15/1681c https://www.law.cornell.edu/uscode/text/15/1681c Search on that page for "Exempted Cases" All of the language about how long negative information can be shown on a credit report is exempted when the loan principle is $150K or greater.
cconstantine 5y ago
> This means no one can even tell you were bankrupt after 7-10 years, which is pretty incredible feature for borrowers. This is absolutely not true. The record of your bankruptcy lives in the public records of the bankruptcy court forever.

by bko 5y ago

ajross 5y ago

> This means no one can even tell you were bankrupt Except the banks who loaned you money! There aren't that many banks, and credit reports aren't their only source of intelligence. I'm always amazed at the number of people who recommend bankruptcy as, like, an investment or risk management tactic. It's a huge mess, and seven years is a long time.

bko 5y ago
> Except the banks who loaned you money! There aren't that many banks, and credit reports aren't their only source of intelligence. I don't think they have that info. It's not like you go take a walk down to your local bank and talk to a loan officer that grew up with you. It's a faceless nameless corporation that does very standard checks. They often don't even hold the debt. Trust me, they want to give you a loan and don't have their shit together enough to get unofficial credit history that they're not legally allowed to use.
- tedyoung 5y ago
  American Express never forgets. 20+ years after declaring bankruptcy and I'm still not able to get an AmEx card, because they have their own records. (I have an 820+ FICO score.)
  - nobody9999 5y ago
    >American Express never forgets. 20+ years after declaring bankruptcy and I'm still not able to get an AmEx card, because they have their own records. (I have an 820+ FICO score.) I can confirm this. I'm 30+ years out from getting a couple thousand written off by Amex and 20+ years out from bankruptcy (a single "debtor" who was the plaintiff in a lawsuit against me, and during which no loans or credit cards were defaulted on) and American Express still won't do business with me, even after being their employee (and having to pay back every penny that was written off before they'd issue me a corporate card) for several years. I'd also note that American Express does not report payment histories on their charge products to the credit bureaus. But they do have a very long memory. Edit: I'd note that I still had a 700+ credit score within the 10 year window after bankruptcy, and my score is in the mid 800s.
  - nine_k 5y ago
    I suspect Visa, MasterCard, and a number of other banks and credit unions would be keen to offer good loan conditions to a person with a demonstrated income and 800+ FICO score.
    - hkt 5y ago
      I'm not from the US so could you explain how credit unions deal with these things? Are they more sympathetic than banks or do they operate as banks-except-in-name?
      - ryathal 5y ago
        For average needs a credit union is a bank with another name. They occasionally have better rates, because there isn't a profit motive for the credit union since it's member owned. If you have special needs beyond checking/savings and home/car loans a credit union may not be able to offer the same level of support as a bank. The quality of credit unions varies wildly, especially on the tech side.
- deleted 5y ago
  [deleted]
alisonkisk 5y ago
7 years is not a long time to live without credit that that a person is shown to be unable to handle. Being bankrupt is great if you are poor.
conductr 5y ago
It’s all relative. Seven years of not being able to utilize debt is better than 70 years payoff schedule where every cent of your disposable income is going to service a debt that you’re unable to really put a dent in and making real sacrifices along the way.
- cconstantine 5y ago
  Creditors love people who have recently filled for bankruptcy. They're vulnerable, known to be bad with money, and can't file again for a number of years.
rdtwo 5y ago
Most of the time banks don’t care. They just securitize the product package it into a bunch of complex instruments and sell them off to “investors”

BobbyH 5y ago

I work in the bankruptcy niche, and I wanted to tweak your statements... Chapter 13 bankruptcy is deleted from your credit report seven years from the discharge date, which comes 3 to 5 years after you file (because there's a 3 to 5 year payment plan). So if you measure from the filing date, Chapter 13 takes 7 + 3-to-5 years to come off your credit report, which is 10 to 12 years from the filing date. Similarly, Chapter 7 bankruptcy is deleted 10 years from the discharge date. In a typical Chapter 7 bankruptcy, the debtor receives a discharge 4 months after filing. So your statement is actually quite close, but to be pedantic, it's 10.33 years from the filing date. In my experience, most Chapter 7 filers can fully recover after about 2 years, provided they are able to make their payments on-time after the bankruptcy.

cconstantine 5y ago
This is a lie that needs to die. Bankruptcy might get removed from your credit report, but the public court records never do. Anyone who does a credit check can (and will) search those public records. Bankruptcy stays with you forever.
- throw__away7391 5y ago
  Some friends of mine declared bankruptcy a few years after the financial crisis due to their business failing. They eventually lost their home, but were able to save up some money by not paying their mortgage while their case was in processing). They rented a place for a few years, but after some time, like 2 or 3 years they were able to qualify for a new mortgage with apparently a decent enough rate and bought a house. They were also somehow able to decide which loans to declare bankruptcy on, so they kept their car loan for example. I mean, I don't know that it is perfect, but I think the bankruptcy laws in the US are pretty decent at least.
  - cconstantine 5y ago
    I'm not saying bankruptcy is bad. It's a necessary escape hatch for the credit industry, and shouldn't have the stigma it does. maunder is absolutely right; the consumer credit industry in the US is nothing but predatory. Good for you if you haven't been bit yet, but their goal is to eat everyone. Whenever I see someone brag about their credit score all I see is a mouse begging for the cat's approval. More and more you can't even opt out of consumer credit. I have attempted to opt out of it by not holding any credit, except I apparently need good credit to live somewhere, or a credit card to rent a car or do some kinds of money transfers. Telling people they can file bankruptcy, "reset to 0", and have another chance to redeem themselves is bullshit. The only place it disappears from is your credit report, and implying that covers it is a brazen lie. It really doesn't. Fuck credit scores. What about the ability to get a job, or not live on the street? Having a bankruptcy from 30 years ago can negatively impact your ability to do either of those things. The credit industry is so deluded that they think your credit report is all that matters, and that's how they want you to think. In reality, it's all that matters to them and they can't wait to get you back in the game.

rootusrootus 5y ago

> no one can even tell you were bankrupt For loans over a certain size (definitely anything mortgage size) there is no limit on the length of the credit report given to them. They may not care when it's been so long, but they can see it all.

actually_a_dog 5y ago
I'm going to say I don't believe this is true. However, I don't know for sure, and I also don't know the magic words to google to verify or disprove this. Can anybody point me to info on the web, or some of those magic words?
- rootusrootus 5y ago
  I do not really know exactly how to cite US code correctly, so I will just get you close enough to do a text search: Go here: https://www.law.cornell.edu/uscode/text/15/1681c https://www.law.cornell.edu/uscode/text/15/1681c Search on that page for "Exempted Cases" All of the language about how long negative information can be shown on a credit report is exempted when the loan principle is $150K or greater.

cconstantine 5y ago

> This means no one can even tell you were bankrupt after 7-10 years, which is pretty incredible feature for borrowers. This is absolutely not true. The record of your bankruptcy lives in the public records of the bankruptcy court forever.