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Does Chapter 7 or Chapter 13 Have the Same Impact on Credit?
Of the two options, Chapter 7 has the more negative impact on your creditors. That’s because you make no repayments. So, financial institutions view you as a higher credit risk. Your score may take a bigger hit with Chapter 7 because of this negative impression. A Chapter 7 bankruptcy is reported on your credit for 10 years from the date of filing.
With Chapter 13, you’re repaying a portion of your debt. Due to this, it is not reported on your credit report for as long as Chapter 7 (reported 7 years). Also, you may give future lenders a bit more of a desirable impression of your credit worthiness due to this payment history. This can translate to a slightly more beneficial outcome for your credit rating.