There is no clear answer to this question. Unfortunately, if you are behind on your bills, your credit may already be bad. Bankruptcy will probably not make things any worse.
The fact that you’ve filed a bankruptcy can appear on your credit record for ten years from the date your case was filed. But because bankruptcy wipes out your old debts, you are likely to be in a better position to pay your current bills, and you may be able to get new credit.
Legally speaking, all negative information regarding your credit has to disappear from the credit report after 10 years. A Chapter 7 and a Chapter 13 bankruptcy will stay for 10 years from the time the case is filed. One major consumer credit reporting agency is said to remove a Chapter 13 bankruptcy history after only 7 years, but it is not legally required to do so. All other negative credit information, such as late payment, civil suits, civil judgment, arrest records, foreclosure, loan modification, credit reduction, debt adjustment, etc., have to be removed from your credit report after 7 years. These time limits, however, do not apply to credit transactions that involve a principal amount of $150,000 or more.
If you decide to file bankruptcy, remember that debts discharged in your bankruptcy should be listed on your credit report as having a zero balance, meaning you do not own anything on the debt. Debts incorrectly reported as having a balance owed will negatively affect your credit score and make it more difficult or costly to get credit. You should check your credit report after your bankruptcy discharge and file a dispute with credit reporting agencies if this information is not correct.
