Farmington, Connecticut
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How Bankruptcy Affects Your Credit Score June 29, 2020

Farmington, Hartford County
How Bankruptcy Affects Your Credit Score, Farmington, Connecticut

Bankruptcy is a legal procedure that relieves you of outstanding debt and offers a fresh financial start, but it’s not without consequences. Filing for bankruptcy will also take a toll on your credit score. Here’s a brief breakdown of how bankruptcy affects your credit rating and what you can do about it.

A Guide to Bankruptcy & Credit Scores 

The Impact on Your Credit Score

Filing for bankruptcy causes your credit score to decrease significantly. Exactly how much depends on a number of factors, including your current score and the amount of debt you owe. Generally, the higher your credit score, the more it decreases. Those with a moderate or poor credit score often experience a less dramatic drop.

The two most common types of bankruptcy are Chapter 7 and Chapter 13. In Chapter 7, debts are immediately cleared through the liquidation of your assets. In Chapter 13, debts are paid through a repayment plan that lasts three to five years.

The type of bankruptcy you file for won’t affect how much your credit score drops. However, Chapter 7 stays on your credit report for up to 10 years, while Chapter 13 only stays on your report for about seven years. Chapter 7 may affect your credit more negatively, as future lenders could see you as a high financial risk.

Building Good Credit After Filing for Bankruptcy

Filing For BankruptcyOnce you’ve filed for bankruptcy, it is important to ensure your score makes an eventual recovery. Pay all bills on time and regularly check your credit score through services like Credit Karma®.

You can also apply for a secured credit card, which allows you to create a credit line based on cash deposits. Paying the card’s monthly bill in full will gradually improve your credit. Create a budget and establish an emergency fund, so you don’t need to rely on credit cards for unforeseen expenses. While bankruptcy stays on your report for a number of years, it has less impact over time if you prove yourself to be financially responsible.


If you’re considering filing for bankruptcy, contact the lawyers at Greene Law P.C. in Farmington, CT, to handle Chapter 7 and Chapter 13 cases. Starting with a thorough pre-bankruptcy evaluation, they’ll create a personalized plan to help you navigate the complex process so that you can resolve your debt for good. Call (860) 676-1336 to schedule a consultation or visit their website to learn more about bankruptcy assistance.

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