A Bankruptcy stays on credit report for ten years, even if the Bankruptcy was Dismissed (not completed).
But is stays on your public record forever. Filing bankruptcy is like having a heart attack. You cannot make a bankruptcy go away, just like you cannot pretend you never had a heart attack Only time will heal both.
I just received an e-mail from a gentleman who filed a chapter 13 bankruptcy, but later decided to dismiss his bankruptcy. He was wondering if the Bankruptcy Court could instruct the credit reporting agency to remove the bankruptcy from his credit report. Unfortunately, the answer is an absolute and resounding “NO”. A bankruptcy will stay on the debtor’s credit report for ten years, even if the case was never completed and later dismissed.
If only this gentleman had talked to an experienced bankruptcy attorney first he would have known this is not something to do without understanding the consequences. I always equate this to jumping off a very high cliff – there may be nothing but water below, or there could be rocks or sharks. Do you really want to take that chance without investigating?
I don’t know if this result would have made a difference for this gentleman, but at least he should have known the truth before filing his bankruptcy. Below is a YouTube video on this topic.
Chapter 7 is not something that you can dip your toe into in order to check the temperature of the water. It is something that you jump into and can only be rescued from it if you show cause” In re Dreamstreet, 221, B.R. 724 (Bankr. W.D. Tex. 1998)
At least once a week I hear a report about someone filing bankruptcy and then trying to get out because they did not like the way things were going.
You can see from the judge’s opinion above this is not that simple. Only a judge can release you from a chapter 7, and then only after you show good cause. How hard is it to show “good cause”, most Arizona courts are not inclined to allow a debtor to dismiss their chapter 7, some other states may be more lenient, but why take that chance? Talk to an experienced bankruptcy attorney who can give you proper advice about the challenges and rewards of bankruptcy (most offer free consultations).
Would you do your own surgery?
In the medical arena this would be similar to starting your open heart surgery only to have you try to leave the operating table halfway through the surgery. Perhaps you should think about the surgery before laying down on the operating table.
I know this is a harsh sentiment, but bankruptcy, like open heart surgery, should not be taken lightly.