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Bankruptcy Attorneys

How will bankruptcy affect my credit?

Creditworthiness is determined by a person’s potential ability and willingness to meet their financial obligations. Each creditor has different criteria and whether you have a bankruptcy on your credit file is typically just one such criteria in determining creditworthiness. Since each creditor has their own methods of analyzing different criteria, there is really no definitive answer on how bankruptcy will affect your credit. It truly depends on the creditor and on your specific situation.

As to the question of how long a bankruptcy will appear on your credit file, there is a definitive answer. Under 15 U.S.C. §1681(c), a bankruptcy will stay on your credit file for ten years from the date your bankruptcy case was filed. However, as strange as this may sound, just because it is on your credit file does not automatically mean your credit will be worse.

Because bankruptcy wipes out your old debts resulting in zero balances on your credit report and for other reasons, you may even be in a better position to pay your bills, and may even be deemed more creditworthy after you receive a discharge in bankruptcy. Especially considering that once you file a bankruptcy there are time periods that prevent you from filing a subsequent bankruptcy for a number of years. Some creditors, feeling somewhat insulated from another bankruptcy for an extended period of time, regularly issue new credit to individuals who recently finished a bankruptcy case. In fact, you can probably get credit even before your bankruptcy is over. The questions will be, what is the interest rate and fee you will have to pay, and can you afford your monthly payments, so you don’t begin a new cycle of painful financial problems.

Remember, if you are behind on your bills, your credit score may already be very low. In which case, bankruptcy will most likely not make it any worse. On the contrary, filing for bankruptcy may even improve your credit. Most importantly, it can greatly help your family’s emotional and financial well-being.

Also, it is important to remember that after the bankruptcy is over, discharged debts should be listed on your credit report as having a zero balance; meaning you do not owe anything on the debt. Debts incorrectly reported as having a balance owed will negatively affect your credit score and make it more difficult to obtain credit. For this reason, you should check your credit report after your bankruptcy discharge and file a dispute with the credit reporting agency if this information is not correct. Of course, the bankruptcy lawyers at Rosen & Rosen can help you with any of these post-bankruptcy matters as well.

For questions regarding credit issues or any other matters pertaining to bankruptcy, feel free to call or contact our bankruptcy attorneys today. Let the lawyers of Rosen & Rosen serve you!

We are a debt relief agency. In addition to other legal services, we help clients file for bankruptcy relief under the Bankruptcy Code.