Bankruptcy and Your Credit Score
For many people considering bankruptcy, the process can appear foreign and overwhelming. While it offers the ability for consumers to discharge debts and obtain a financial fresh start, it does affect consumers in other ways. One of the most common concerns we hear from clients exploring their bankruptcy options is how it will affect their credit.
There are a lot of myths surrounding bankruptcy, especially in regard to how it affects credit. Contrary to what you may have heard, filing bankruptcy does not permanently ruin credit. Although a bankruptcy filing will be visible on credit reports, the effects are temporary and in no way ruinous. Typically, Chapter 7 bankruptcy will remain on your credit for up to 10 years, and Chapter 13 bankruptcy for up to 7 years.
Unlike some myths may lead you to believe, filing bankruptcy does not mean consumers will be blacklisted or barred from making purchases or obtaining loans in the future. Still, taking proactive and educated steps to rebuild one’s credit after bankruptcy is crucial.
For many consumers, bankruptcy allows them to gain control of their finances and prepare for the future. By practicing responsible credit behavior and exercising one’s financial freedom, consumers can effectively rebuild their credit score. This can be achieved by using low-limit credit cards, practicing responsible spending, and making it a priority to always make payments. In many cases, consumers are able to restore their credit to much higher scores than they had before filing bankruptcy.
At HoganWillig, our bankruptcy attorneys are passionate about guiding clients through the bankruptcy process, addressing their concerns, and helping them achieve future success. Helping clients understand how bankruptcy affects their credit score is part of this process.
If you have questions about bankruptcy and your credit, or how our firm can help, call 716-636-7600 for a free consultation.