Short answer: a bankruptcy can stay on your credit reports for up to 10 years (CFPB), so borrowing soon after a discharge is often harder and more expensive. Before you take a new loan, check that your reports show the discharge correctly, rebuild with small, low-risk credit, and compare any offer by APR and total cost. Be wary of anyone who promises to clean up your report or asks for money up front. How Chapter 7 and Chapter 13 treat a loan is in what bankruptcy does to a personal loan. This is general information, not legal advice.
What your credit report shows
- A bankruptcy under Chapter 7, 11, 12 or 13 can stay on your report for up to 10 years from the date of the order or adjudication, and in certain instances longer (CFPB).
- Accurate negative information generally cannot be removed, but you can dispute errors with both the credit reporting company and the company that reported it, free of charge; they must investigate, usually within 30 days (CFPB).
- After a discharge, check each loan that was included. A discharged debt is one a creditor or debt collector can no longer collect (CFPB). If a report is wrong, see disputing a loan reporting error; how to pull your reports is in checking your credit report before a loan.
Debts you still owe
A discharge does not end every obligation. If you reaffirmed a loan, you stay liable for it (U.S. Courts), so keep paying it on time; the payments are part of your new record. If a loan was secured, for example by a car, and the debt is unpaid, the lender may still have a right to repossess the collateral after the discharge (CFPB). If a collector asks you to pay a debt that was discharged, the CFPB has sample letters you can use to respond (CFPB).
Still in a Chapter 13 plan? The U.S. Courts say a debtor may not take on new debt without consulting the trustee, because more debt may make it harder to complete the plan (U.S. Courts). Talk to your trustee or attorney before you apply for any loan.
Rebuilding before you borrow
- Secured credit card: you put down cash, for example $500, and can spend up to that amount; paying the bill restores it (CFPB).
- Credit builder loan: the money is held for you as savings while you make small payments, usually over six to 24 months, and you receive it at the end (CFPB). Costs and risks are in how credit builder loans work.
- Pay on time, every time: payments on these products are reported to the three nationwide credit reporting companies, while debit card and cash payments typically are not (CFPB).
- Ask your bank, credit union or a nonprofit credit counseling agency which of these they offer (CFPB).
What a high rate costs: $2,000 over 24 months
Example only, our calculation: $2,000.00 borrowed for 24 months, no fees, fixed monthly payments. 11.90% is the Federal Reserve's August 2026 average for 24-month personal loans at commercial banks (Federal Reserve G.19); 36% is a made-up higher rate to show the difference, not a quote. After a bankruptcy, the rates you are offered may be higher than the average.
| Rate | Monthly payment | Total paid | Interest |
|---|---|---|---|
| 11.90% APR (August 2026 average, 24-month loans) | $94.05 | $2,257.20 | $257.20 |
| 36% APR (example of a high rate offer) | $118.09 | $2,834.16 | $834.16 |
Loan payment: P x r / (1 - (1 + r)-n), r = APR / 12, rounded to the cent. On this example the higher rate costs $576.96 more. If the only offers you get are far above the average, waiting while you rebuild can cost less than borrowing now.
Red flags in offers aimed at new filers
- A fee before you get the loan. Paying to "unlock" a loan is the classic advance-fee scam (FTC); see advance-fee loan scams.
- A promise to remove the bankruptcy, or other accurate and current negative information, from your report, or to raise your score by a set amount (CFPB).
- Credit repair that wants payment first: under the federal Credit Repair Organizations Act, credit repair companies cannot request or receive payment until they have completed the services they promised (CFPB).
- An offer you cannot compare: if you cannot see the APR and the total you will repay before you sign, walk away.
To check a company before you apply, see how to check if a lender is licensed.
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Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.
Sources
- CFPB: How long does a bankruptcy appear on credit reports?
- CFPB: Is it possible to remove accurate but negative information from my credit report?
- CFPB: Can a debt collector try to collect on a debt that was discharged in bankruptcy?
- United States Courts: Chapter 7 Bankruptcy Basics
- United States Courts: Chapter 13 Bankruptcy Basics
- CFPB: What are some ways to start or rebuild a good credit history?
- Federal Reserve: G.19 Consumer Credit (released October 7, 2026), terms of credit, August 2026: credit card plans and 24-month personal loans
- CFPB: How can I tell a credit repair scam from a reputable credit counselor?
- FTC: What To Know About Advance-Fee Loans