Does Bankruptcy Hurt My Credit Score?
Filing for bankruptcy is a difficult decision, and one that should only be made under the counsel and guidance of a skilled bankruptcy attorney. Although bankruptcy might seem like an end-all situation, it can be a new beginning for many. It is true that your credit score will be heavily impacted by filing for bankruptcy; however, you can rebuild your score. In some cases, people’s credit scores actually were higher over time after filing for bankruptcy.
Facts about Credit Scores & Bankruptcy
In order to minimize the impact of bankruptcy on your credit and to rebuild your score as quickly as possible after filing for bankruptcy, it’s important to understand how bankruptcy actually works.
Take a look at these facts about credit scores & bankruptcy:
- Will I have a higher credit report after bankruptcy if I had no negative information on the credit report before bankruptcy?
- Not necessarily, the presence of bankruptcy information & how long it has been since bankruptcy was filed are strong factors in calculating a post-bankruptcy credit score.
- Does all bankruptcy information stay on my report for 10 years?
- Only Chapter 7 bankruptcy remains on your report for 10 years. Other types of bankruptcy remain on your report for 7 years.
- How long will it take to rebuild my credit score?
- Depending on your circumstances, it will take 4-5 years at least to rebuild your credit score. In many cases, individuals have recovered high credit scores in this time by making on-time payments, keeping low balances on credit cards, and adding positive credit to offset the presence of negatives on the report.
- Does bankruptcy impact everyone’s credit score in the same way?
- The amount of debt discharged and the number of debts included in the bankruptcy will factor into how much bankruptcy affects your credit score.
- Will bankruptcy always have a negative impact on my credit score?
- The negative impact of a bankruptcy on your credit score will diminish over time, although it is kept on record for 7-10 years post-filing.
To learn more about filing for bankruptcy, contact Albaugh Law Firm today. We share 50 years of experience and can capably guide you through your circumstances.