' Will Bankruptcy Affect My Credit Score - Law Offices of Robert M. Geller
CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

How Will Filing for Bankruptcy Affect My Credit?

Will Filing Bankruptcy Affect My Credit Tampa, Florida.Will Filing Bankruptcy Affect My Credit?

Not paying your bills affects your credit negatively. And yet problems with credit are one of the main reasons people cite for not filing for bankruptcy. The truth is your credit will suffer when you file for bankruptcy, but that’s only a part of the total picture. How will filing bankruptcy affect my credit?

The impact bankruptcy has on a person’s credit varies based on his or her situation. According to FICO, bankruptcy tends to have a negative impact of about 100 to 200 points on your credit. The higher your score when you file the greater the impact.

For instance, someone with a credit score of 700, which isn’t really bad, will see a drop of about 200 points. But if your score is in the high 600s, chance are you’ll only see a drop of about 150 points.

If your score is already in the average to the below-average range, you might not see that much of a drop. And since most people considering bankruptcy tend to already have a few dings on their credit, the impact might not be as bad as they are expecting. So if you’re wondering “will bankruptcy affect my credit score?” here’s what you need to know:

Bankruptcy Chapters and Your Credit Score

In addition to your existing credit, another factor to consider regarding your credit score and bankruptcy is which chapter you choose. Chapter 7 and Chapter 13 affect your credit score in different ways.

The first major difference is the length of time each bankruptcy appears on your credit report. Chapter 7 bankruptcies can remain on your credit report for up to 10 years. Chapter 13 bankruptcy usually appears on your credit for up to seven years. Both are a significant period, but in the latter case, you’ll be free of the mark three years soon. But keep in mind, Chapter 13 bankruptcy takes three to five years to complete, while Chapter 7 is usually over in about six months. So in both cases, you’re looking at an approximately 10-year commitment regarding your credit situation.

When it comes to the actual impact, Chapter 7 is viewed as more negative than Chapter 13. This is because creditors see that you did not follow through on paying any of your debt in Chapter 7. In Chapter 13, you don’t receive a discharge until your payment plan is complete, so creditors were able to recoup at least a portion of what you owed. It’s easy to see when lenders would prefer to get some of their debt repaid, as opposed to taking a total loss on everything they’re owed.

You can learn more about the differences between Chapter 7 and Chapter 13 bankruptcy, check out this information from Experian.

Two Most Important Factors When It Comes to Your Credit Score and Bankruptcy

Though there are several things you’ll want to consider when it comes to your credit score and filing for bankruptcy, there are two things that have the greatest impact:

  1. Filing for bankruptcy is going to impact your credit score negatively, but not as much as the continued non-payment of your debt.
  2. The further away you get from bankruptcy the less of an impact it has.

What Does This Tell You If You Are Considering Bankruptcy?

If you’re wondering, “will bankruptcy affect my credit,” you aren’t alone. Most people ask this question before filing.

For starters, that filing hurts you, but the damage isn’t irreparable. As a matter of fact, many lenders prefer to see you take drastic action to get back on the right track than to see you ignoring your financial problems. And secondly, filing for bankruptcy sooner can be smarter than putting it off. The sooner you file the sooner you can begin to move forward and rebuild.

Keep in mind, rebuilding your credit after filing for bankruptcy doesn’t happen automatically. You need to work at it and you’ll be starting from a dark financial place. But bankruptcy is the first step toward making things light again. Our 720 credit program can help you with rebuilding your credit after you’ve filed for bankruptcy.

If you’d like to know more about how bankruptcy affects your credit or you’re ready to discuss filing with an experienced professional, contact the Law Office of Robert M. Geller at 813-254-5696 to learn more.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

How Do I Find a Bankruptcy Attorney in Clearwater?

If you're facing financial hardships and are considering bankruptcy in Clearwater, finding the right attorney can be a critical decision....
Read More

Should I Sell My Home to Get Out of Debt?

Debt is a common modern problem. Whether it's credit cards, student loans, or medical bills, debt can cripple even the...
Read More

What to Ask a Bankruptcy Lawyer

What should you ask a bankruptcy lawyer? Financial problems can be incredibly stressful. One option that many people turn to...
Read More

Is It Easy to File for Bankruptcy?

Bankruptcy is a legal process that allows individuals and businesses to eliminate or reorganize their debts. It offers relief to...
Read More

How to Stay Motivated to Pay Off Debt

If you are struggling with debt, you are not alone. The average American has tens of thousands of dollars in...
Read More

Can I Fire My Bankruptcy Attorney?

Filing for bankruptcy can be overwhelming. Your bankruptcy attorney plays a crucial role in navigating you through the process. Unfortunately,...
Read More

Am I Responsible for My Parent’s Credit Card Debt?

As we grow older, our parents also age. Sometimes they become dependent on us in many ways. Even if they...
Read More

How to Hide from Debt Collectors

There are many ways to “hide” from debt collectors. You can ignore their calls, not answer your door, or ask...
Read More

Is Your Spouse Responsible for Credit Card Debt in Florida?

Debt can be overwhelming, especially when you're not sure who is responsible for it. That's why it's important to understand...
Read More

What Happens If You Ignore a Debt Collector?

Debt can be overwhelming. It’s easy to let bills pile up and miss payments, and before you know it, you...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions