Consumer Events

Bankruptcy

A bankruptcy filing is a public court record. Credit bureaus report:

• Chapter type (Chapter 7, 11, 12, 13)
  • Chapter 7 and 13 most common
• Filing Date
• Status (e.g., filed, reaffirmed, confirmed, discharged, dismissed)
• Disposition date (when applicable)

The chapter determines how long the bankruptcy remains on a credit report and how lenders typically interpret risk.

Chapters

Chapter 7 — Liquidation Bankruptcy

What It Means:

• Designed to eliminate unsecured debt (e.g., credit cards, medical bills)
• Non-exempt assets may be liquidated, though many cases are “no-asset”
• No repayment plan
• Fastest bankruptcy type

Timeline:

• Discharge typically occurs 3–6 months after filing

Credit Reporting:

• Reported as “Chapter 7 Bankruptcy”
• Remains on credit report for up to 10 years from filing date
• Individual accounts included should show $0 balance / included in bankruptcy
• Seen as the most severe bankruptcy type due to full discharge without repayment

Chapter 13 - Wage Earner/Repayment Plan

What It Means:

• Individual agrees to a court-approved repayment plan (3–5 years)
• Used to catch up on mortgages, car loans, or taxes
• Debts are not eliminated immediately

Key Terms:

• Confirmed: Court has approved the repayment plan
• Discharged: Occurs only after successful completion of the plan

Credit Reporting:

• Reported as “Chapter 13 Bankruptcy”
• Remains on credit report for up to 7 years from filing date
• May show statuses such as:
  • Filed
  • Confirmed
  • Discharged (after plan completion)
• Often viewed more favorably than Chapter 7 because repayment is made

Chapter 11 - Reorganization Bankruptcy

What It Means:

• Typically used by businesses, sometimes high-income individuals
• Debts are restructured through a reorganization plan
• Business usually continues operating

Key Terms:

• Confirmed: Reorganization plan is approved and binding
• Discharge: Often tied to confirmation, but depends on plan terms

Credit Reporting:

• Reported as “Chapter 11 Bankruptcy”
• Reporting duration varies but is commonly up to 10 years
• Interpretation depends heavily on:
  • Whether the filer is an individual or business
  • Whether the plan was successfully completed

Chapter 12 - Family Farmer or Fisherman

What It Means:

• Specialized version of Chapter 13
• For qualifying family farmers and fishermen
• Allows seasonal or irregular income considerations

Credit Reporting:

• Rare, but reported similarly to Chapter 13
• Typically remains for up to 7 years from filing

Status Terms

• Filed: Bankruptcy case initiated
• Confirmed: Repayment or reorganization plan approved (Ch. 11 / 13)
• Reaffirmed: Removes debt from bankruptcy proceedings (debts a consumer wants to retain e.g. mortgage)
• Discharged: Legal release from qualifying debts
• Dismissed/Removal: Case closed without discharge (generally worse than discharge)

Bankruptcy Summary

Bloom Bankruptcy Events:

• Filed
  • Initiates Bankruptcy
• Removal
  • Dismissed by Courts or rescinded by Consumer
• Confirmed
  • For Chapters 11 or 13, removes Bankruptcy indicator during repayment
• Discharged
  • Completion of Bankruptcy
• Reaffirmed
  • Removes collateral from Bankruptcy in order to retain debt (e.g. mortgage or car loan)
• Reaffirm Rescinded
  • Adds collateral debt back into Bankruptcy
• Reversed
  • Reversing a bankruptcy event will bring the consumer to its previous bankruptcy state
  • If there is no previous bankruptcy state, the bankruptcy will no longer be reported

Nice to know

• When you report a bankruptcy, it will be reported on all accounts related to that consumer.
• When you discharge a bankruptcy, you can choose which accounts the bankruptcy should be excluded from.