When debt gets to be a major burden on your finances, it can feel like you’re drowning. Keeping your head above water financially gets difficult as you manage payments to lenders and your regular bills. While bankruptcy might be the only way out, it’s understandable if you have questions or concerns about filing. The team with James L. Gutting, Attorney-at-Law can work as your bankruptcy law office to answer your questions about the process of filing for bankruptcy as well as what will happen to your credit score.
What happens to my credit score immediately after I file for bankruptcy?
Once you file for bankruptcy, your credit score will take a substantial drop. Depending on where you start, your score can drop between 130 and 200 points. However, you can start working immediately to rebuild your credit and get back in good standing with lenders.
What determines my credit score?
Your credit score demonstrates your ability to repay a debt to lenders. It shows your reliability in managing debt with your income level. Your credit score is the result of a formula that takes into account your payment history with previous debtors, the level of debt compared to your income, and the number of credit accounts that you have open at the time. If you have a history of making payments on time and your income level is much higher than the level of debt you have accrued, then your credit score will be high.
How long will bankruptcy stay on my credit report?
How long your bankruptcy stays on your credit report after your final debt discharge depends on the type of bankruptcy you file. Although, you can feel comfortable knowing that it’s not going to be there forever. It will eventually be removed. If you file Chapter 13 bankruptcy, this will stay on your credit report for seven years while Chapter 7 will remain for 10 years. It’s important to keep in mind that if you continue to work at improving your credit score, bankruptcy will not have as great of an effect on your life.
How can I rebuild my credit score after bankruptcy?
As previously mentioned, you can start rebuilding your credit immediately after you’ve filed for bankruptcy. You can do to start rebuilding your credit that by:
- Making payments on time
- Opening a new bank account
- Opening a new credit card
- Check your credit report
The sooner you take steps to start improving your credit score after filing for bankruptcy, the better off you’ll be financially in the future.
Can filing for bankruptcy improve my credit score?
The answer to this question is eventually. When you file for bankruptcy and have debts that are discharged, it will likely make managing your finances much easier. As you recover from the initial drop in your credit score, you can use the knowledge that you’ve gained from credit counseling and your overall experience to create a better financial future for yourself.
Contact us for help
Get help from a bankruptcy law office in Flint, MI to create the best situation for you, your finances, and your family as you come out of bankruptcy. The team with James L. Gutting, Attorney-at-Law is here to work for you and guide you through the process. We’ll provide you with expert advice so that you can be knowledgeable about how your bankruptcy will impact your life going forward. Call us at 989-743-1188 to schedule an appointment. You can also send us a message using our online contact form and we’ll promptly get back to you. We’re always available to chat about your legal needs.