How Will Filing Chapter 13 Affect My Credit  

Chapter 13 is a restructuring arrangement. Under Chapter 13, the debtor pays some or all of the debts over a time of 3 to 5 years to the Trustee who issues the funds according to a plan accepted by the Bankruptcy Court.

Your credit rating during and after completion of Chapter 13 will eventually be based upon the individual judgment of any credit-grantor who keeps a track of your credit record. Your credit record is a record of all your past credit routines. This record is made available to a creditor, who according to his or her own standards makes judgment of granting credit to you.

Filing chapter 13 may deteriorate your credit, at least temporarily. Nonetheless, if most of a person's debts are finally paid off under a chapter 13 plan, that fact may be taken into account by credit reporting agencies. If very little amount is paid on most debts, the credit-rating effect of a chapter 13 case may be similar to that of a chapter 7 case.

A Chapter 13 appears on a debtor’s credit report 7 years from the date of filing. Since a Chapter 13 typically takes 3 to 5 years to complete, it will completely disappear 2 to 4 years thereafter. If a Chapter 13 bankruptcy is dismissed, it will still remain on a credit report for 7 years from the date of fling.
Hence, it is extremely important for consumers to identify that bankruptcy is not a cure for financial suffering. It is but one part of a by and large strategy to fiscal constancy.

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