For many, bankruptcy is an excellent tool to help them overcome significant debt and get their lives back on track once again. That being said, after filing for bankruptcy, many peoples’ concern is what will happen with their credit score, and whether they will be able to secure a line of credit after filing. Please continue reading and speak with our New York bankruptcy attorney to learn more about how filing for bankruptcy may affect your credit score, and whether the type of bankruptcy, such as Chapter 13 or Chapter 7, will affect your credit score. Here are some of the questions you may have:
How does filing for bankruptcy affect your credit score?
As you may know, the primary downside of filing for bankruptcy is that it can negatively impact your credit score. This makes it more difficult to secure a line of credit for some time, however, you are far from “ruined,” or anything of the sort. In fact, you still have a ton of options available, and you should be able to secure a line of credit in a shorter amount of time than you may think.
Is it worse for my credit to file Chapter 7 or Chapter 13 bankruptcy?
In short, as far as your credit score itself goes, the type of bankruptcy you file for will have zero effect. Whether you file Chapter 7 bankruptcy or Chapter 13 bankruptcy, your credit will remain the same. That being said, when trying to secure a credit line, your prospective lender will most likely examine far more than just your credit score, and the type of bankruptcy you filed for may be one of those factors. For example, while Chapter 13 involves a repayment plan of your debt, Chapter 7 bankruptcy simply discharges the majority of your debt. Though both of these will put you in a better financial standing going forward, a lender may consider Chapter 13 bankruptcy as a more responsible way of handling debt, and will, therefore, be more likely to grant you a line of credit.
How long will a bankruptcy stay on my credit report?
Typically, a bankruptcy will stay on someone’s credit report for 10 years after filing, though you should be able to secure a line of credit long before this 10-year mark is up. If you have any further questions or you believe bankruptcy is the right option for you, please do not hesitate to speak with our knowledgeable Rockland County bankruptcy attorney today.
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.