From falling behind with your mortgage to missing credit card deadlines, there are several ways you can rack up considerable debt. Filing for bankruptcy can alleviate some of the burdens while you take steps to repair your finances. This legal process is included in your credit report, so here is a brief guide to how bankruptcy impacts your credit score.  

Short-Term Impact Can Be Severe

What your credit score was before filing for bankruptcy plays a major part in how many points you’ll lose after filing. Credit scores in the 670 to 850 range are considered good to exceptional. If you had a high score to begin with, expect it to drop by 200 points or more. Scores in the 300 to 669 range are considered poor or fair to begin with, which doesn’t incur as much of a hit when bankruptcy is declared. The severity of your debt will factor into how many points are deducted from the credit score, too. Those with a high financial burden often owe many different creditors. More points are dropped depending on how large of a debt you need to discharge.  

You’ll Get a Chance to Rebuild Credit in the Long Term

While your bankruptcy case is being worked out, creditor harassment will stop, as people can’t reach out for payments during the legal process. This means they can’t add to the debt already owed, which can help stabilize your new credit score while you get control of your finances. Having certain debts discharged alleviates some of the financial strain, so you can work on repaying other debts, such as student loans and back taxes, that weren’t covered under the terms. Chapter 7 bankruptcy is erased from your credit history after 10 years, and Chapter 13 filing vanishes from the report after seven years.

If you think bankruptcy is the best option, contact attorney Harry B. Zornow in Hamilton, OH. With over 30 years of experience, he will answer questions, strive to make the situation less stressful, and let you know all of the viable options and how to proceed with the process. To schedule a consultation in Butler County, call (513) 737-9770, or visit the law office online to learn more about his services.