How Bankruptcy Affects Your Credit

Understanding How Bankruptcy Affects Your Credit Score

Many people shy away from bankruptcy, fearing their credit will be destroyed. Unfortunately, if you are having enough financial trouble to be considering bankruptcy, your credit score has likely already been affected. Excessive credit card debt, high medical debts, late payments, foreclosure and other issues can do so much damage to your credit score that bankruptcy can be a very responsible move.

At Suarino Law, PC in Atlanta, Georgia, we have represented dozens of hard working people who had been just scraping by while avoiding filling for bankruptcy. Their good intentions often ended up ruining their credit. Bankruptcy is a valuable option for individuals who need debt relief and a clean slate.

The bankruptcy lawyers of Suarino Law will carefully explain how you can rebuild your credit after filing for bankruptcy. We will connect you to valuable credit counseling programs to help you resolve your existing debts and move forward positively. When you take steps to work out chronic debt, your credit score can increase.

Contact us today to schedule a convenient consultation.

Bankruptcy and Your Credit Score

We have extensive experience in bankruptcy and foreclosure defense. Attorney Steve Suarino started this law firm after working as a collections lawyer, so he has a firsthand understanding of the tactics collection companies use and the real effect personal bankruptcy has on credit.

We offer a hands-on approach, making sure our clients understand how their credit scores will be affected by Chapter 7 or Chapter 13 bankruptcy.

• Chapter 7 – For the next 7-10 years, your credit report will reflect that you filed for bankruptcy. Chapter 7 eliminates qualifying debt, so it reduces your debt-to-income ratio. You can also start rebuilding your credit by using credit cards for specific bills and paying off the balance each month. That can actually improve your chance to qualify for credit in the future. After two or three years, you are likely to qualify for a conventional mortgage.
• Chapter 13 – Qualifying debts will be reorganized into a three to five-year payment plan. If you make your payments on time, your credit score will improve during this time, although, you can't establish new credit. You will need permission from the bankruptcy court should major purchases need to be made.

Overall, what your credit score was when you went into bankruptcy will be the number one factor affecting your credit score after bankruptcy. We will carefully explain the likely credit ramifications of bankruptcy in your case, so you can make an informed decision.

Contact Us

If you are dealing with financial trouble but are concerned about how bankruptcy could affect your credit score, we are ready to help. Contact us today to schedule a convenient appointment at our law office, which is located between the Gwinnett Mall and the Spaghetti Junction.