Are you aware of the fact that over 500,000 Americans file bankruptcy each and every year? This is a staggering number and it really is no surprise when you factor in the current shape of the economy. While it might be somewhat refreshing to know that you are not alone in your struggle, it could also be a sign that the country is headed for a recession.
Whatever this situation is, you need to know that there are still repercussions after filing for bankruptcy, and one of the repercussions is a bad credit report. This is why it is imperative that you understand everything you possibly can about filing bankruptcy and how it can affect your credit report.
This is why it is important that you understand everything you possibly can about filing bankruptcy and how it can affect your credit report.
Understanding How Long Bankruptcy Affects Your Credit Report
When it comes to filing bankruptcy, you need to understand that there are several different forms of bankruptcy. You also need to be aware of the fact that each degree of bankruptcy can stay on your credit for a different number of years.
For instance, a Chapter 7 bankruptcy can show up on your credit report for 10 years, whereas a Chapter 13 will stay on your credit report for just 7 years.
There are some situations in which bankruptcy can be removed earlier than the above-mentioned time, and in addition to this, you still can get a line of credit after filing for bankruptcy.
So, regardless of what anyone tells you, this doesn’t mean that you have to wait for 7 to 10 years after filing bankruptcy to buy a home or car. In fact, it might on just be a few years before you are able to file for a new line of credit.
However, this does not mean that you won’t be penalized with extremely
In fact, it might on just be a few years before you are able to file for a new line of credit. However, this does not mean that you won’t be penalized with extremely high interest rates.
With that being said, there are steps that you can take towards rebuilding your credit so that you are able to receive much better rates.
What Does Bankruptcy Do To Your Credit Score?
It is truly never easy to remove bankruptcy from your credit score and just having it on your record can have a major negative impact. This is why it is imperative to always weigh your options and do everything you possibly can to avoid filing in the first place.
For instance, if you have a credit score of 680, a bankruptcy charge can drop that score by anywhere from 130 to 150 points. If you have a credit score of 780, a bankruptcy charge can drop that score by 220 to 240 points.
This means that you are not only going to have to pay extremely high interest rates on your loans and credit card, but it could prevent you from being eligible for them in the first place. Even the amount of money that you can borrow can be limited depending on your credit score.
Unfortunately, for some individuals there really is no choice but to file for bankruptcy, however, it is still important to understand how it can affect you and your credit score in the future. Make sure you’re aware of the repercussions in advance!
Can You Rebuild Your Credit After Filing Bankruptcy?
After filing bankruptcy, it is entirely possible for an individual to start to rebuild his or her credit.
The best place to start is by trying to the bankruptcy blemish completely removed from your record. Along with this, you need to understand where and how your finances went wrong, and what you can do to prevent this situation from happening again.
Another great tactic is to ensure that you are paying all your bills and debts on time because missed and late payments make up the largest portion of your credit score.
If you, for any reason, miss paying your bill on time, do a request for a forgiveness and fee waiver, it works!