Most people know that discharging debt will hurt their credit score. When it comes to the specifics, though, few know precisely how filing will affect their creditworthiness or even how long the bankruptcy will remain on their record. Regardless of whether you declare Chapter 7 or Chapter 13 bankruptcy, you can expect it to affect your score in a major way. Fortunately, this impact is temporary, and discharging various debts could end up being a smart move if you’re facing serious financial hardship. Here’s what you should know about bankruptcy’s impact on credit before filing. 

The Initial Impact 

If you declare Chapter 7 or Chapter 13 bankruptcy, you can expect your credit score to drop by more than 100 points almost immediately. Those who have a fairly decent score might see it drop by 200 points, while those whose score has already taken a hit from multiple missed payments might notice a decrease of 150 points. Fortunately, you can take steps to start improving your score right away. For example, if you make on-time payments for all accounts that were not discharged, it should boost the score by a few points every month. 

The Long-Term Consequences 

Even as your score increases, potential lenders, landlords, employers, and other parties who check your credit will be able to see that you filed for bankruptcy. This can make it challenging to secure financing, especially when it comes to major purchases like vehicles and real estate. Fortunately, it will not stay on your credit report forever. A Chapter 7 filing will be removed after 10 years, while a Chapter 13 bankruptcy will fall off after seven years. 

If you want to learn more about the advantages and drawbacks of declaring Chapter 7 or Chapter 13 bankruptcy, turn to the Law Offices of Harry G. Lasser. Based in Cookeville, TN, this firm is led by a seasoned bankruptcy attorney who has more than two decades of experience helping clients get their lives back on track. When you turn to this team for legal guidance, you won’t be judged for your financial situation. Instead, you’ll receive one-on-one counsel that is tailored to your particular situation. To schedule an initial consultation, fill out the form on the firm’s website or call (931) 372-9988 today.