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Will Filing for Bankruptcy Ruin My Credit Score?

Rebuilding Your Credit

Filing for bankruptcy can be difficult, but it can also be the best option to get out of debt. Understanding what filing for bankruptcy will do to your credit score and if you'll have any chance of getting credit in the future is essential. In this blog, we'll discuss how filing for bankruptcy affects your credit score and whether or not you can still obtain credit after filing for bankruptcy. We'll look at how long filing for bankruptcy stays on your record and give tips on rebuilding your credit so that you can make informed decisions about filing for bankruptcy.

Bankruptcy's Impact on Credit

A bankruptcy filing can be incredibly detrimental to your credit score. According to Experian, filing for bankruptcy can cause a drop of up to 240 points from your FICO credit score. This is because filing for bankruptcy is seen as a significant negative event and can stay on your credit report for up to 10 years.

Your credit score will depend on how much debt you had before filing for bankruptcy and the types of accounts affected. Different filing types also have other impacts; Chapter 7 filing affects your credit score more than filing under Chapter 13, as it requires you to liquidate all of your assets.

Can I Get Credit After Bankruptcy?

Yes, you can still obtain credit after filing for bankruptcy. However, it is crucial to understand that filing for bankruptcy will make it more difficult and expensive to get approved for a loan. Most lenders require borrowers to have better credit scores post-bankruptcy filing to get approved.

Additionally, you may have limited access to credit and loan products after filing for bankruptcy. You may be required to pay higher interest rates and could be limited in the types of loans you can get.

Rebuilding Your Credit

The good news is that filing for bankruptcy doesn't mean you can never have good credit again. There are steps you can take to rebuild your credit, such as:

Paying bills on time. This is the number one factor in determining your credit score.

Keeping balances low on revolving accounts. Having higher balances can negatively affect your score.

Obtaining a secured credit card with a low limit and making small monthly purchases you pay off.

Keeping your credit inquiries to a minimum. Too many inquiries can lower your score.

It may take some time, but with patience and discipline filing for bankruptcy doesn't have to mean the end of your credit history.

Get Help from a Bankruptcy Attorney

Filing for bankruptcy can be a complex process. It's essential to consult a bankruptcy attorney if you are considering filing for bankruptcy. An experienced attorney can help you determine which filing type is right for you and will guide the best steps to take to rebuild your credit after filing for bankruptcy.

At Pacific Cascade Legal, we know how significant it is to achieve financial freedom. Our team is prepared to help you navigate the bankruptcy process to get you back on your feet.

Learn more about how we can help with bankruptcy or schedule a consultation by calling (888) 981-9511 or visiting our website.