Posted on May 1st, 2023.

If you're considering bankruptcy, one of the biggest concerns you may have is how it will affect your credit rating.

In this blog post, we'll explore the impact that bankruptcy can have on your credit, as well as some steps you can take to rebuild your credit after filing.

How Bankruptcy Affects Your Credit

Bankruptcy has a negative impact on your Credit Rating

When you file for bankruptcy, it can have a significant impact on your credit rating. This is because bankruptcy is a major negative event that is recorded on your credit report. Depending on the type of bankruptcy you file and the state of your credit before filing, your credit rating could drop by 200 points or more.

Consequences on Credit Score

The impact of bankruptcy on your credit score will depend on several factors, including the type of bankruptcy you file and your credit history before filing. In general, Chapter 7 bankruptcy is more damaging to your credit score than Chapter 13 bankruptcy. Chapter 7 bankruptcy typically stays on your credit report for 10 years, while Chapter 13 bankruptcy stays on your report for 7 years.

Bankruptcy may cripple your chances of getting credit

In addition to lowering your credit score, bankruptcy can also impact your credit in other ways. For example, it can make it difficult to obtain credit in the future, as lenders may be hesitant to lend to someone who has filed for bankruptcy. Additionally, if you do get approved for credit, you may have to pay higher interest rates and fees.

Pay close attention to your Credit Report

After filing for bankruptcy, it's important to check your credit report to make sure that all of the information is accurate. You should also make sure that the bankruptcy is listed correctly on your credit report. If you notice any errors, you can dispute them with the credit bureaus to have them corrected.

How to rebuild Credit After Bankruptcy?

Although bankruptcy can have a negative impact on your credit, it is possible to rebuild your credit over time. One of the first steps you can take is to make sure that you pay all of your bills on time. This includes credit card payments, rent, and utilities. You should also consider getting a secured credit card, which can help you build credit while limiting your risk.

Be careful with your Credit Utilization

Credit utilization is a measure of how much of your available credit you are using. After filing for bankruptcy, it's important to keep your credit utilization low. This means that you should avoid using too much of your available credit and paying off your credit card balances in full each month.

Contact Sidney Mickell, Esq for Bankruptcy Advice

In conclusion, bankruptcy can have a significant impact on your credit rating, but it is possible to rebuild your credit over time. By taking steps to improve your credit utilization, paying your bills on time, and getting a secured credit card, you can start to rebuild your credit after filing for bankruptcy.

If you're considering bankruptcy and want to learn more about how it could impact your credit, don't hesitate to reach out to Sidney Mickell, Esq. Our experienced bankruptcy attorneys can help you understand your options and guide you through the process of filing for bankruptcy.

Contact us today at 3233091137 or [email protected] to schedule a consultation and get the advice you need to make an informed decision about your financial future.

Don't let the fear of how bankruptcy will affect your credit rating hold you back from seeking the debt relief you need. With the right guidance and support, you can take control of your financial situation and start on the path to a brighter future.