How Long Does Personal Bankruptcy Remain on a Credit Report?
If you are considering a personal bankruptcy filing in South Florida, you may be wondering: how long will the bankruptcy show up on my credit report? Many debtors have heard common myths and misconceptions about individual bankruptcy filings, including that the bankruptcy case will be on their credit reports forever or that they will never be eligible to obtain credit again. These are myths, not facts. While a bankruptcy filing will show up on your credit and will impact your credit score, the effects might not be as drastic as you have been led to believe. Our bankruptcy lawyers in South Florida can explain in more detail below.
How Bankruptcy Impacts a Person’s Credit
Bankruptcy does not impact each person’s credit in exactly the same way. As Experian (one of the three credit reporting bureaus) explains, the “actual impact” of a bankruptcy filing “will depend on the makeup of your credit profile when you file.”
Often, debtors who ultimately file for bankruptcy do so after missing many payments with creditors, becoming delinquent, and ultimately being in default after many months of missed payments and the creditor selling off the debt to a debt collector. Experian clarifies that a person’s payment history has the greatest impact on their FICO credit score, so missing payments over an extended period of time will impact your credit significantly to begin with, even before you file.
In general, debtors can anticipate that an initial bankruptcy filing will result in a credit score that can drop by up to 200 points, but it will depend on where the person’s credit score was prior to the bankruptcy filing. Some credit scores are impacted less. The bankruptcy filing will also remain on a person’s credit report for 7 to 10 years, depending on the type of bankruptcy filing.
Rebuilding Your Credit After Your Bankruptcy Filing
Just because a bankruptcy filing is on your credit does not mean that you cannot begin rebuilding your credit. With either a Chapter 7 or Chapter 13 filing, you can essentially begin rebuilding your credit immediately after your discharge.
A Chapter 7 filing will remain on your credit report for 10 years from the date of filing, and a Chapter 13 filing will remain on your credit report for 7 years from the date of filing. Yet within just a short period of time, you can often obtain a credit card, or a “credit-builder loan” that can help you to improve your credit score. Within just two years, you could even be eligible for certain types of mortgages again. As long as you make on-time payments going forward, your credit will continue to improve.
Contact a West Palm Beach Bankruptcy Attorney Today for Assistance with Your Bankruptcy Filing
Many debtors who file for bankruptcy worry about how the bankruptcy filing will impact their credit. While a bankruptcy filing does affect an individual’s credit, the impact might not be as significant as you are fearing. As we discussed above, there are many ways to begin rebuilding your credit immediately after your bankruptcy case ends, and debtors are often eligible for credit, including mortgages, even when a bankruptcy filing is still on their credit report. To find out more about the effects of bankruptcy or to learn about how bankruptcy could help you with your current financial circumstances, you should get in touch with one of the experienced West Palm Beach bankruptcy lawyers at Kelley Kaplan Delaney & Eller, PLLC. Contact our firm today to have your questions answered and to learn more about the bankruptcy services we provide in South Florida.
Source:
experian.com/blogs/ask-experian/how-does-filing-bankruptcy-affect-your-credit/
