Credit glossary
Chapter 7 bankruptcy
A liquidation bankruptcy that wipes out many debts within months and can stay on your credit report for up to 10 years from filing.
The case appears in the public records section with its chapter and filing date, and each account included should update to show it was discharged with a $0 balance. Federal law allows a bankruptcy to be reported for up to 10 years (15 U.S.C. 1681c), and TransUnion says Chapter 7 cases stay up to 10 years from filing. Checking that every discharged account shows a zero balance is the first rebuilding step.
Mortgage waiting periods run on their own clocks, usually from the discharge date. Fannie Mae's Selling Guide sets 4 years after a Chapter 7 discharge, or 2 with documented extenuating circumstances, and Freddie Mac's manual rules use 48 months. Scoring companies don't publish separate treatment for each chapter, so the practical differences show up in timing and loan rules.
Guides that go deeper
- Chapter 7 vs. Chapter 13 on your credit report: the timeline differenceChapter 7 can stay on your report 10 years, a completed Chapter 13 usually 7, both from the filing date. How each one reports, and how mortgage rules treat them.
- Rebuilding credit after bankruptcy: the first 24 monthsWhat your report should look like after a bankruptcy discharge, which accounts to open first, which offers to ignore, and how long the record really stays.
- Mortgage waiting periods after bankruptcy, foreclosure or short saleFHA, VA, USDA, Fannie Mae and Freddie Mac waiting periods after Chapter 7, Chapter 13, foreclosure, short sale and deed in lieu, with sources and start dates.
Sources
- 15 U.S.C. 1681c: Requirements relating to information contained in consumer reports, Legal Information Institute, Cornell Law School
- How Long Does Bankruptcy Stay on Your Credit Report?, TransUnion
- B3-5.3-07, Significant Derogatory Credit Events: Waiting Periods and Re-establishing Credit, Fannie Mae Selling Guide
- Underwriting Reminders for Loan Product Advisor Caution Risk Class Mortgages, Freddie Mac
This is education, not legal or financial advice. Spot an error? Tell us and we'll fix it.