When Do You Need to Disclose Your Bankruptcy?

Find out when you'll have to tell creditors and others about your bankruptcy.

A bankruptcy proceeding isn’t confidential—it will remain on your credit report for up to ten years. And because bankruptcy filings are a matter of public record, anyone can search for it. But most people won’t go to that trouble, and you won’t need to disclose your bankruptcy unless explicitly required, such as on an application for credit, employment, or security clearance.

Learn more about life after bankruptcy.

How Long Does Bankruptcy Stay on Your Credit Report?

A Chapter 7 bankruptcy stays on your credit report for ten years after your filing date. A Chapter 13 bankruptcy gets removed after seven years because debtors repay at least some of their debt. While the bankruptcy information remains on your credit report, anyone who pulls your credit can learn of your filing. So an employer or credit provider that doesn’t directly ask you about previous bankruptcies on your application can find out through a credit check.

Military Personnel and Security Clearances

If you want to join the military, you will typically have to disclose previous bankruptcies during the application process. Depending on the specific branch of the military you are applying to, a credit check can also be required. Because each branch of the military has its own rules about financial eligibility, talk to a military recruiter to learn more about whether filing for bankruptcy will affect your service eligibility.

If you are in the military, it’s not so much the bankruptcy that will have a negative impact on your security clearance, but your financial stability. Security clearance determinations are usually made on a case by case basis. Before filing your case, check with the necessary military personnel or department to discuss any issues that might jeopardize your security clearance or otherwise adversely affect your military career. For more information, read Special Rules for Military Members.

Do You Have to Disclose Your Bankruptcy to Your Employer?

You don’t have a proactive duty to tell your current employer that you filed for bankruptcy in the past. However, because your bankruptcy filing is a public record, your employer can find out about it through a public record search or credit check. Also, if you are in a Chapter 13 bankruptcy and fail to make your monthly plan payments, in some states, the court or the bankruptcy trustee will send your employer a wage deduction order to withhold the payments directly from your paycheck.

Disclosing Bankruptcy on Credit or Employment Applications

If you are applying for a new job, the application may ask about prior bankruptcies. Also, a credit check can be part of a background check required by the employer. If the job application asks you about bankruptcy, be honest and disclose it. If you lie on your employment application, it may be grounds for the employer to terminate or not hire you.

Similarly, if you are applying for new credit, you’ll want to answer any questions relating to prior bankruptcies truthfully. In most cases, your lender will also require a credit check before lending you the money. If you intentionally lie on the credit application, it can constitute fraud and lead to potential problems or legal action in the future.

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