Today’s Durham Bankruptcy Blog and Greensboro Bankruptcy Blog post answers discusses what filing for a Durham Bankruptcy or Greensboro Bankruptcy will do to your credit score. The short answer is that filing for bankruptcy will cause your credit score to go down, but it will also stop the hemorrhaging and allow for you to begin repairing your credit. In a lot of ways, filing for bankruptcy is taking one step back in order to take two steps forward.
If you have any questions about what a Durham Chapter 7 Bankruptcy or Greensboro Chapter 7 Bankruptcy will do to your credit score, you can call or email one of our Durham Bankruptcy Attorneys or Greensboro Bankruptcy Attorneys for free.
The longer answer:
A Durham Chapter 7 Bankruptcy or Greensboro Chapter 7 Bankruptcy will show on your credit report for up to 10 years. Immediately after you file your bankruptcy your credit score will be pretty terrible. However, if you are behind on enough debts that you are considering filing for bankruptcy, your credit score is probably already pretty terrible.
When a prospective client is focused on the affect a bankruptcy will have on their credit score, I typically believe that he or she is focusing on the wrong issue. If you have enough debt, and are far enough behind on your debt payments, that you no longer believe you can pay back your debts, the last issue on your mind should be what your credit score is. If you are in this situation your credit score is not good, and any decrease in your credit score as a result of filing for bankruptcy is well worth the discharge of thousands of dollars of debts.
By filing for a Durham Bankruptcy or Greensboro Bankruptcy you will wipe out all of your debt, so the negative treatment of being late on a payment will stop. The bankruptcy will cause your credit score to drop, and it will typically be very difficult for you, for the next 10 years, to obtain any unsecured credit (credit cards, personal loans, etc.). However, you will be able to begin the process of improving your credit after your case is filed. Future secured creditors will see that you filed bankruptcy and cannot file bankruptcy for another 8 years, so your future secured creditors will know (a) that you are not a bankruptcy risk and (b) that you do not have a mountain of unsecured debt preventing you from paying on your secured debts. Also, to the extent that you kept secured debts through your bankruptcy, such as your house or car, your future secured creditors will see that you continue to timely pay your debts, and that you cannot file for bankruptcy any time again soon.
Also, to the extent that you are able to get credit after your Durham Bankruptcy or Greensboro Bankruptcy, you will typically be paying exorbitant rates of interest and fees. There is a specific sector of the finance industry that cater specifically to individuals who have just filed for bankruptcy, so in the event that you must take out more credit you will have some opportunities (though at very high fees and interest rates).
Depending on how bad your credit score is pre-bankruptcy, it is possible that within one year your credit score may actually be higher than your pre-bankruptcy credit score. Filing for a Durham Bankruptcy or Greensboro Bankruptcy will have a big impact on your credit score, but it is not the only factor in determining your credit score.
If you would like any more information on your credit score and filing for a Chapter 7 Bankruptcy, give one of our Durham Bankruptcy Lawyers or Greensboro Bankruptcy Lawyers a call at (888) 820-5885. You can also reach our Durham Bankruptcy Attorneys and Greensboro Bankruptcy Attorneys by email at email@example.com.