Can Debts Discharged in Bankruptcy Appear on My Credit Report?

In short, yes. Not only will a bankruptcy filing remain on your credit report for seven to ten years, but you can expect information about the debts discharged (forgiven) in bankruptcy to continue to appear on your credit report, too. In this article, you'll learn what should—and should not—show up on your credit report after you receive a bankruptcy discharge and what to do if your credit report contains incorrect information.

(Find out about other post-bankruptcy credit issues in Improving Credit After Bankruptcy.)

Reporting Debts as Discharged in Bankruptcy

While it might be daunting to think about a bankruptcy filing showing up on your credit report for ten years, it might not be as bad as you think. A bankruptcy discharge can help you clean up debt much faster than you'd be able to do yourself.

For instance, instead of a delinquent or unpaid debt lingering on your report for years, it will show as being discharged as part of your bankruptcy. In fact, creditors won't be able to report your debt in a variety of ways that could cause your credit to suffer, such as allowing the obligation to show as:

• currently owed or active
• late or delinquent or outstanding
• charged off
• having a balance due or
• converted to a new type of debt (re-aged or given new account numbers, for example).

Such reporting labels are often the reason creditors deny applicants credit. In some cases, applicants must pay off such debt as a condition of loan approval. Instead, when you pull your report, each qualifying debt should be reported as:

• having a zero balance and
• discharged, "included in bankruptcy," or similar language.

Unfortunately, some creditors don't update information to the credit reporting agencies. This tactic could be a way to get you to pay up, even though you no longer legally owe the debt. If your credit report shows an improperly labeled discharged debt, you'll want to take steps to correct the problem.

Checking Credit Report Accuracy After Bankruptcy

Under federal law, you can get one free credit report every 12 months upon request from each nationwide credit reporting agency (Experian, Equifax, and TransUnion). However, during the COVID-19 pandemic, the agencies started providing free weekly credit reports online, a service that's now permanent. You can claim your reports by visiting www.annualcreditreport.com.

A prudent approach is to check them three months after receiving your bankruptcy discharge. That should allow enough time for creditors to report the bankruptcy information.

Thoroughly review each listed debt for accuracy. Also, watch out for unfamiliar creditor names or debts, as they might be discharged debts that were bought and sold to a third party but are not accurately reflected as having been discharged. To make changes, follow the instructions under the "Correcting Misreported Discharged Debt" heading.

You'll want to claim each of the remaining two credit reports at three-month intervals. Each time, check to see if the credit report reflects the previously requested changes, and, take steps to correct any remaining inaccurate information. This approach should allow you to clean up your credit report at no cost to you.

(You'll find more resources in Credit Reports and Credit Scores.)

Correcting Misreported Discharged Debt

Disputing errors is relatively straightforward. You'll do so by using the online procedure provided by each of the three major credit reporting agencies.

A creditor who repeatedly refuses to report your discharged debt properly might be in violation of the bankruptcy discharge injunction prohibiting creditors from trying to collect on discharged debts. If you take steps to remedy the misreporting, and the creditor (or collector or debt buyer) refuses to fix the error, talk to a bankruptcy attorney.

(Learn more in Credit Repair for Bad Credit.)

Finding the Law

The Fair Credit Reporting Act is the law that requires consumer reporting agencies (also called credit bureaus) to maintain an accurate file of your credit information. Creditors who report your information to the consumer reporting agencies (CRAs) must also be truthful and accurate. The FCRA tells CRAs and creditors what they can report and how long it can legally appear on your credit report.

(You can find out more by reading What Is the Fair Credit Reporting Act?)