Q: I am buying a house as a co-borrower. I declared Chapter 7 bankruptcy more than eight years ago. I have provided my lender with a copy of the petition and the discharge along with 180 billion other documents he requested.
It has been more than seven years after the bankruptcy filing, do lenders still have the right to ask for the copy of my bankruptcy paperwork?
A: Probably. First, a bankruptcy filing can stay on your credit history for up to 10 years. So at eight years, it probably hasn’t fallen off of your credit history, which is why your lender asked about it.
Meanwhile, just because you declared bankruptcy more than eight years ago doesn’t mean the bankruptcy was finalized within a year of the filing. You (or other borrowers in your situation) may have had an active bankruptcy for a year or more after the initial filing.
In some bankruptcy filings, you might have still had obligations under the bankruptcy that were resolved or finalized at a later time. If you agreed to pay off a debt at a later time, the current lenders want to know what those debts were and whether they were settled at a later date.
If everything was settled and discharged seven years or more ago, you will find that as time goes by less and less lenders will need to review the documentation from your bankruptcy.
As you probably know, your credit history and credit score were hurt significantly by your bankruptcy filing. If you have paid your bills on time and have managed your credit wisely since then, you should have seen your credit score rise significantly.