When a person considers filing for bankruptcy, it is common to worry about the effect that filing may have on their credit score. To learn how bankruptcy might affect your credit, continue reading. Reach out to our experienced Rockland County bankruptcy attorney for assistance with this process. To learn more about our service can how we can assist you, give our firm a call today to schedule your initial consultation.
How will bankruptcy affect my credit score?
Filing for bankruptcy may make your score take a dip if your debt-to-asset ratio is high before your file. However, it should not affect your credit much more than that.
If your credit is good before you file for bankruptcy, your score may take a bigger plunge after you choose to file. It is important to be prepared to see your credit drop in score immediately following your filing.
Will it matter if I file for Chapter 13 or 7?
It is possible that some credits may view filing for Chapter 13 as “more responsible” and a better credit risk than filing for Chapter 7. However, this is the only difference to note regarding filing for one chapter over the other. It will make no difference on the effect you will see on your credit score whether you file for Chapter 13 or Chapter 7.
How long can I expect bankruptcy to stay on my credit report?
Filing for Chapter 13 or Chapter 7 bankruptcy will appear on your credit report for up to 10 years. This timeframe may be extended if credit reporting agencies report your bankruptcy for longer than 10 years if you apply for a loan or life insurance policy in an amount greater than $150,000. This can also occur if you apply for a job with an annual income greater than $75,000.
Can bankruptcy improve credit right away?
Bankruptcy will not immediately improve your credit score. However, it is a route taken by many to better your credit in the long term. If you are behind on payments or have accounts in collection, filing for bankruptcy can benefit you by allowing you to get back on your feet by getting rid of many types of debts and providing you with a fresh start financially. Bankruptcy can also assist you in making loan credit payments on time which can help you to rebuild credit.
Contact our experienced New York firm
Bankruptcy, for many people, is a frightening endeavor. Fortunately, with the help of an experienced attorney, it does not have to be. If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options. We will have your back every step of the way.