The Effects of Bankruptcy on Your Credit
Homeowners at risk of default often do not consider bankruptcy an option. They fear the repercussions on their credit history. But it’s important to see the larger picture. Over time, you may actually improve your credit report by stripping debts and making timely payments according to a practical reorganization plan.
Oaktree Law attorneys can help you understand the possibilities of life after bankruptcy. Instead of late or partial payments, or payments being skipped entirely, bankruptcy can offer a debt restructuring to fit your current means.
Contact us at 800-535-1627 If you have questions about the effects of bankruptcy on your financial future.
Bankruptcy and Your Credit Record
It’s important to understand the damage you may be doing to your credit by avoiding bankruptcy. Sometimes a fresh start is exactly what’s needed. Bankruptcy always has consequences. It will go on public record and remain on your credit history for up to 10 years. The worst day of your score is the day you decide to file. Immediately after filing your credit will begin to rebuild. But there are also benefits that allow you access to credit in a short amount of time.
- Chapter 7 bankruptcy: Since your debt-to-income ratio will be lowered due to the discharge of unsecured debt, your credit rating may be less impacted than you think. Like any inquiry or credit reporting this bankruptcy will remain on record for 10 years. However, due to history of default your credit score may not be affected as significantly as you think. Most people are able to rebuild their credit and even qualify to buy a home within 2 years from the date of discharge.
- Chapter 13 bankruptcy: Chapter 13 bankruptcy will remain on your record for 10 years, like any other inquiry or credit reporting, but by consistently meeting the terms of your repayment plan over three to five years, your credit score will be improved and you can gain a fresh start.
Worried about bankruptcy and your credit?
Bankruptcy is not a death sentence for your credit. If anything, you may improve your credit worthiness with the fresh start bankruptcy can provide. Contact us or call 800-535-1627 to speak with a skilled bankruptcy attorney.