One of the most common concerns with filing Bankruptcy is whether it will have a negative impact on a person’s credit. The impact that filing Chapter 7 or Chapter 13 Bankruptcy will have on a person’s credit depends on a number of things. Once a person gets to the point where they are considering bankruptcy, their credit is usually not in great shape to begin with. They usually have a large amount of debt as compared to their income, have missed payments or gone into default on some of their debts, have lots of late payments, and so forth. For people in this situation, filing for Bankruptcy can help them get their credit back on track. A Chapter 7 bankruptcy stays on your credit report for around 10 years from the date of filing and a Chapter 13 Bankruptcy stays on your credit report for around 7 years. However, as time passes from the date that you filed, the bankruptcy will likely have less of an impact.
Some creditors are more likely to give credit to individuals who recently filed bankruptcy than to individuals who have a large amount of outstanding debt and/or debts that are not getting paid. Their reasoning is that a person who recently filed bankruptcy has more money available to pay them whereas a person struggling to pay a number of other debts does not. A bankruptcy can help you get your finances back on track and should not have an extreme long-term impact on your ability to get credit. There are countless individuals who currently have credit cards, car loans, mortgages, etc. who filed bankruptcy in the past.
If you think bankruptcy may be the right choice for you, feel free to call us anytime to discuss your options and address any questions you may have.