Bankruptcy is not the end of the world. In fact, it is a new beginning for those who file. Whether you are filing for yourself or for your business, bankruptcy can change your life for the better. The word still carries with it a bit of a stigma but more and more people are opening up to what bankruptcy can do for those in financial trouble. Let's take a look at the effect bankruptcy has on your credit score in today's post.
For starters, a Chapter 13 bankruptcy filing that has been completed will remain on your credit report for no more than seven years. All of the debts discharged in the filing will also remain on the report for seven years.
When you file for bankruptcy, you are discharging a host of debts that you cannot repay to creditors. Because of this, you will lost quite a bit of credit in your name. Depending on your situation, you could have a big hole on your credit report. This hole could make it look like you've never held credit before in your life.
If this is the case, you will need to rebuild your credit as soon as possible after a Chapter 13 bankruptcy. You can do so by applying for and acquiring a car loan, a store credit card or any other secured credit card. Make sure you keep the oldest credit accounts you have active. Be sure you don't apply for a multitude of accounts at the same time. This will be reflected on your credit report.
If you are considering filing for Chapter 13 bankruptcy be sure to do so with the help of an experienced bankruptcy law attorney in Long Island. This is an important process that should never be overlooked.
Source: Money Crashers, "How Does Bankruptcy Affect Your Credit Score?," accessed Jan. 17, 2018