After Business Bankruptcy: 6 Records That Show the Filing and How Long

A business bankruptcy leaves at least six separate records behind, and each keeps its own calendar. One of them never expires. Another lasts ten years, but only for the right kind of debtor. A third lasts five years and then lingers for one more.

The owner who asks how long the filing "stays on record" is asking six questions at once, and the answers differ because the records were built by different statutes for different readers: a court, a credit bureau, a secretary of state, a future lender, a future bankruptcy judge. Sorting them is the first practical task after the case closes.

1. The Court Docket Keeps No Calendar at All

The petition, the schedules, the financial-affairs statement, every motion and every order sit on the bankruptcy court's docket. Section 107(a) of the Code makes papers filed in a case, and the dockets themselves, "public records and open to examination by an entity at reasonable times without charge." Anyone with a PACER account can retrieve them from a desk anywhere in the country, for a per-page fee small enough to deter no one.

The statute sets no date on which that openness ends. Section 107(b) lets the court protect a trade secret or confidential commercial information on request, which is a narrow door and not an eraser. The list of creditors the company filed, with the amount each claimed, remains the list.

Of the six records, this is the one owners think about least and the one a diligent counterparty reads first.

2. The Owner's Credit Report Counts Ten Years, If the Case Was the Owner's

The Fair Credit Reporting Act limits what a bureau may put in a consumer report. Under 15 U.S.C. 1681c(a)(1), no consumer reporting agency may include "Cases under title 11 or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years." In a voluntary case the order for relief is the filing itself, so the ten years run from the day the petition went in.

The phrase that decides most owners' situation is buried in the definitions. A "consumer," in section 1681a(c), "means an individual." A sole proprietor who files is an individual, and the case is the proprietor's own; it belongs on the proprietor's report and carries the full period. An LLC or corporation that files is not a consumer, its chapter 7 is not a case "involving the consumer," and the statute gives the bureau no reason to attach it to the owner's file, though the owner who also filed personally to deal with the guaranties has, of course, created a second case that does belong there. The statute also requires the report to identify the chapter, and where a case is withdrawn before a final judgment, to say so once the bureau receives documentation of the withdrawal. Whether a shorter period applies to any particular chapter is a matter of bureau practice, not of the statute, and practice can change without notice to anyone.

Ten years is a ceiling written into law. Nothing in the statute stops a bureau from removing an item sooner, and nothing requires it to.

A report pulled in year eleven should not show the case. If it does, the dispute is a statutory one, and it rests on a date the court's own docket will confirm.

3. The Ten Years Disappear for Large Transactions

Section 1681c(b) switches the time limits off for a report used in connection with "a credit transaction involving, or which may reasonably be expected to involve, a principal amount of $150,000 or more," life insurance of the same face amount, or employment "at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more." For a business owner, the next equipment line or commercial mortgage may sit above that threshold, though whether a personal report pulled for a business loan is a "consumer report" at all is a question the statute does not answer cleanly.

Where the exception applies, the old case can appear, lawfully, on that report in year fifteen.

4. The Guaranty Accounts Run on a Seven-Year Clock With a Late Start

When the company's case ends and a funder or bank turns to the guarantor, any account it reports against the owner personally is governed by different paragraphs. Accounts "placed for collection or charged to profit and loss" drop off after seven years, and section 1681c(c)(1) starts that seven years "upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency" that preceded the collection or charge-off. A judgment on the guaranty follows paragraph (2): seven years from entry "or until the governing statute of limitations has expired, whichever is the longer period."

So the guaranty's record may outlast the company's bankruptcy record on the owner's own report, even though the bankruptcy never appeared there. Whether a given creditor reports to consumer bureaus at all is the creditor's decision, and a signed guaranty proves nothing about it either way. There are owners who find nothing on the report and conclude the matter is over, though the report was never where the claim lived.

5. The Lien Index Lapses in Five Years and Lingers One More

The UCC financing statements that lenders and funders filed against the company do not vanish when the company liquidates. Under the uniform text of UCC 9-515(a), "a filed financing statement is effective for a period of five years after the date of filing," and it lapses unless a continuation statement is filed in the six months before that period ends. Section 9-522(a) then requires the filing office to keep the record "for at least one year after the effectiveness of the financing statement has lapsed," searchable by the debtor's name.

A secured party can file a termination earlier, and under section 9-513 must do so on demand in the circumstances that statute describes. Business credit files, which Experian says include UCC filings, judgments and collections, are not consumer reports about an individual, and the FCRA periods above do not govern them.

6. The Next Petition Asks About the Last Eight Years

Official Form 201, the petition every LLC or corporation files, asks at item 9, "Were prior bankruptcy cases filed by or against the debtor within the last 8 years," and at item 2 for all other names the debtor used in the same period. An individual's chapter 7 discharge is barred under section 727(a)(8) if the debtor received one in a case commenced within eight years before the new petition. The eight-year question is a record of its own, kept by the debtor and answered under penalty of perjury.

Reading the Six Records Together

Delancey Street is not a credit repair service and not a law firm, and it does not dispute bureau entries or give legal advice about them. Its work is negotiating merchant cash advance and related business debt, beginning with a free, confidential initial review and coordinating with independently licensed counsel where a legal question arises. For an owner whose company has closed but whose guaranties have not, that review addresses the fourth record, the one still being written. An owner facing inaccurate entries needs a consumer-law attorney. An owner considering a personal filing to end the guaranties needs bankruptcy counsel first.

The court's docket will outlast every other record on this list. It holds the company's last honest accounting, which is not the worst thing to leave behind.