If a person files for Chapter 13 bankruptcy, it will generally stay on his or her credit report for seven years. If a person files for Chapter 7 bankruptcy, it will generally stay on his or her credit report for up to 10 years. In a Chapter 13 case, a court will allow a Louisiana debtor to use regular income to pay off debts over a period of three or five years.
In a Chapter 7 case, an individual has non-exempt assets sold with any funds raised used to cover balances owed to creditors. Any remaining balance left over after items are liquidated is discharged. Individuals may be able to ask that a bankruptcy be removed from their credit report by asserting that an entry is not accurate. It is also possible to ask the court that handled the case if it verified a bankruptcy entry before it was added to a credit report.
If this did not happen, the bankruptcy could be removed from a credit report earlier than it otherwise would have been. However, there are ways that an individual can improve a credit score even with a bankruptcy still showing up on a credit report. Ideally, individuals will pay their bills in a timely manner and refrain from obtaining new debt.
Filing for bankruptcy may be an effective way for a person to obtain debt relief. In a Chapter 7 case, debts could be discharged without a debtor paying anything to creditors. In Chapter 13 cases, debtors may be allowed to reorganize their debt in a way that makes it easier to pay.