What Is the Effect of Bankruptcy on Credit?

All of your credit history is stored with the credit bureau for seven years. In other words, all of the payments that you make on your debts, all of the defaults that you have on your loans, all of the lawsuits or foreclosures or repossessions that you have had are reflected in your credit file.

A bankruptcy is also reflected in your credit file. However, for most people who need to file bankruptcy, it does not hurt their credit rating. At the time that they file bankruptcy, their debts are so large in proportion to their assets and their income that they lack credit worthiness.

Bankruptcy May Improve Credit Worthiness

A Chapter 7 bankruptcy will get rid of debts. Although the bankruptcy will remain on a credit file for years, a bankruptcy will usually improve a person's credit worthiness. After debts have been discharged in a Chapter 7 bankruptcy, a debtor can often get a new car loan or new credit cards. A debtor may even qualify for a new house loan.

In a Chapter 13 bankruptcy, a credit rating usually does not improve until they are done with their Chapter 13 case and their debts have been discharged by court order.

Of course, each person's circumstances are different. You should discuss the effect of bankruptcy on your credit with one of the experienced bankruptcy lawyers at Platt & Westby, P.C., in Phoenix, Arizona. We have been helping people with debt relief issues since 1973. Whether you want to learn more about the effect of bankruptcy on credit, or have questions about credit repair after filing bankruptcy, we can provide the experienced advice and legal guidance you need to get a fresh start.

Contact Our Phoenix Chapter 7 and Chapter 13 Bankruptcy Attorneys

To learn more about the effect of bankruptcy on credit, contact our Phoenix law firm to speak with an experienced Arizona bankruptcy lawyer at Platt & Westby.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. The information contained in this message is general and should not substitute for the advice and counsel of an experienced bankruptcy attorney.

Bankruptcy costs are one of the best bargains in law, starting with a $750 retainer. The fixed fee of a case will be discussed in a free case evaluation conference.