Having to file bankruptcy will impact various areas of your life, including your credit score. If you are considering filing a Chapter 7 or a Chapter 13, you need to know how yours might be affected. All of these impacts could have a negative pull on your life for a while.
One point that you have probably heard is that the bankruptcy will remain on your credit report for up to 10 years if you file a Chapter 7 and up to 7 years if you file a Chapter 13. That is a valid statement, and how much it hurts you during that time depends on various factors.
The dip in your credit score when you file is going to make it difficult for lenders to see you as a suitable credit risk. You can expect a drop of anywhere from 160 to 220 points. This significant drop can bring your overall rating down to poor or fair, depending on where it was to begin with. You will only experience this credit drop if your score is good at the time you file the bankruptcy. if you are already delinquent on your debts, the bankruptcy will actually help your credit because you won't owe anyone.
Your credit score can impact many areas of your life including interest rates, insurance and renting an apartment. This is so important that our office, as part of our services, will sign you up for the 720 Credit Score Program, at no cost. This program teaches you the little things you can do after bankruptcy to increase your score as quickly as possible.
Taking all of these things into consideration can help you to determine what to do. Ensure that you are basing your decisions off of your situation and not what happened with someone else by discussing the specifics of your situation with an experienced legal professional.