Most people filing for bankruptcy understand that it can affect your credit score, but how long does it really have to hang over you? That can depend on a few factors, like the kind of bankruptcy you file for, but you can expect this to stay on your credit report for years. This can be a great chance to rebuild your credit and improve your financial health, and a New City, New York bankruptcy attorney from our firm can help guide you through the process.
Does the Type of Bankruptcy Matter?
The type of bankruptcy process you go through can make a difference here. Chapter 7 bankruptcy, popularly referred to as liquidation, requires you to sell off as many assets as you can and repay creditors with the proceeds. This will generally stay on credit reports for up to 10 years.
Chapter 13 bankruptcy allows debtors with a high enough wage to develop a plan that pays off their creditors in a short time frame, usually between three and five years. This type of bankruptcy can remain on your credit report for seven years.
How Can My Credit Report Affect Me?
Your credit report can affect you in a variety of ways. Someone is probably going to check your credit score and report when you:
- Apply for loans
- Try to buy a car
- Seek housing
Your credit report shows somebody how you have handled debts in the past and gives them an idea of how you will handle them in the future. Unfortunately, a low credit score will reflect poorly on you and make it more difficult to sign onto some financial obligations.
Can I Improve My Credit Report After Bankruptcy?
It is important to remember that, despite some of its drawbacks, bankruptcy gives you a chance to rebuild your credit and reclaim your financial freedom. To be honest, holding a lot of debt is not good for your credit score either. If you are already overburdened with debt to the point that you are considering filing for bankruptcy, it is unlikely that your credit report is in good shape.
So yes, a bankruptcy filing is going to stay on your credit report for a while. That bankruptcy can give you a second chance though, making it possible to rebuild your credit and save for the future. If you are seriously considering filing, it may be time to speak to an attorney.
Contact Our Bankruptcy Attorneys
So while the bankruptcy process does come with some downsides of its own, it also offers a chance to rebuild your credit. Your credit score might take a hit in the short term, but if you absolutely cannot manage your current debts this might be your best option. Contact the Lauterbach Law Firm and schedule a consultation. We can help you evaluate your options.
