If you’re facing an overwhelming amount of medical bills or consumer debt, declaring bankruptcy may be the answer. Before filing for bankruptcy, however, it’s important to understand the impact of doing so. Fortunately, a bankruptcy attorney can answer all your questions on the subject. In the meantime, here is some general information about discharging debt and the effect it has on credit. 

Common Questions About Bankruptcy & Credit

How will filing bankruptcy affect my score initially?

If your credit score is decent, it will drop considerably—perhaps 100 or even 200 points—after filing. If it’s already fairly low, filing will only be responsible for a small dip. A bankruptcy attorney can explain exactly what you can expect regarding your credit score after evaluating the situation. 

Can I minimize the impact that bankruptcy has on my credit?

There is no way to declare bankruptcy without your credit taking a hit. However, you can make it easier to repair credit afterward by filing sooner rather than later. The longer people wait to file when they're struggling financially, the more missed payments they will have, resulting in more delinquent marks for years to come. 

Will I be able to secure financing after declaring bankruptcy?

While it may be difficult at first, it’s possible for people who have recently discharged their debt to secure new revolving accounts and even car loans. However, interests may be higher. As for borrowing sizable sums, like mortgages, expect to wait at least a year or two before meeting the minimum qualification requirements—and don't miss any other payments during that time. 

Will bankruptcy remain on my credit report forever?

Chapter 13 will remain on your credit report for seven years, while Chapter 7 will be reported for 10 years after filing. When it comes to your actual score, however, a bankruptcy will impact it less and less with every passing year. Additionally, there are ways to improve it gradually. For example, you could take out a secured credit card and continue making on-time payments for any debts that were not discharged. 

If you’re thinking about discharging debt through bankruptcy, get in touch with Mark O. Grater Attorney at Law. Located in Groton, CT, this bankruptcy attorney has more than 30 years of experience practicing law. A tireless advocate for each of his clients, he assists with everything from workers’ compensation claims to personal injury lawsuits. To learn more about his impressive track record of success in the legal field, visit his website. To request an initial consultation with this knowledgeable bankruptcy attorney, call (860) 449-8059.