Discharging debt through bankruptcy can provide a much-needed clean slate. Bankruptcy lawyers can attest, however, that debtors are often reluctant to file because of the impact it will have on their credit score. If you’re struggling financially, here’s what you should know about declaring bankruptcy and how it could affect your ability to finance future purchases.
4 FAQ About Bankruptcy & Credit Score
Will bankruptcy destroy a good credit score?
Filing for bankruptcy will affect high credit scores the most. If your score is over 780, for example, you can expect it to drop by at least 240 points. If it’s closer to 680, on the other hand, it might drop by about 140 points after your petition is processed.
What if I had a bad credit score before declaring bankruptcy?
It’s not uncommon for people on the verge of bankruptcy to have poor credit. Making late payments—or missing them altogether—will cause your score to drop. Should this be the case, you’ll probably notice only a slight drop in your score after filing.
How long will bankruptcy affect my credit score?
A Chapter 7 filing will appear on your credit report for 10 years. A Chapter 13 filing, on the other hand, will fall off after seven years. That doesn’t mean, however, that you can’t boost your score in the meantime.
As soon as you file, you can take steps to start rebuilding your credit immediately. A strategic bankruptcy lawyer can help you devise a comprehensive plan for regaining your financial footing in the aftermath.
How can I rebuild my credit faster after declaring bankruptcy?
There are a number of ways to boost your credit score after discharging debt. In addition to staying on top of all monthly financial obligations, for example, you can obtain a secured credit card and use it responsibly. Because these cards require a cash deposit, they’re available to those whom lenders might otherwise deem too risky.
Some can be converted to traditional credit cards after a certain period of time. You can also ask a loved one to add you as an authorized user to one of their accounts. Then their on-time payments will appear on your credit report.
To see if you’re a good candidate for discharging debt, turn to Mark O. Grater Attorney at Law in Groton, CT. Backed by more than 30 years of experience in the legal field, this knowledgeable bankruptcy lawyer is proud to counsel clients across Southeastern Connecticut. When you turn to Attorney Grater, you can count on receiving personalized and attentive guidance at every stage of your case. To request a consultation with this bankruptcy lawyer, reach out on his website or call (860) 449-8059.