Will my Chapter 13 bankruptcy be treated differently from a Chapter 7?

Preferential Treatment

Yes. Your Chapter 13 bankruptcy will get preferential treatment by the credit bureaus. This does not means that you will not have to make a little credit repair effort to insure that they do what is expected!

The Law

The Fair Credit Reporting Act has but one single reference to bankruptcy. It is as follows:

Section 605. Requirements relating to information contained in consumer reports [15 U.S.C. §1681c]

(a) Information excluded from consumer reports. Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information:

(1) Cases under title 11 [United States Code] or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case maybe, antedate the report by more than 10 years.

What it Means

In plain English this means that no bankruptcy should report longer than 10 years from the date of discharge.

The credit bureaus, however, will give your Chapter 13 bankruptcy very different treatment. They will stop reporting your bankruptcy just seven years from the filing date. This can make a very big difference to your credit repair progress. To understand the implications, let’s say that after filing your bankruptcy you took three years to complete payments to your trustee and to get discharged. This means that you only have four years after discharge before the bankruptcy stops reporting.