Declaring bankruptcy is not an easy decision to make. However, it might be the best course of action if you are looking to review, understand, and improve your finances after falling into debt you can’t repay.
With the help of seasoned bankruptcy lawyers in Rancho Bernardo, you will be able to lead your filing to a desired outcome. After your case is closed, however, you will need to repair and rebuild your credit score, as well.
How does bankruptcy affect credit?
There is one thing you must know about bankruptcies: they do affect your credit score, and they stay on the record for a while. Once your debts are discharged and your bankruptcy case is closed, your credit score can take a hit of between 160 and 220 points.
Many debtors fear this, as most lenders will choose to extend or withhold your credit based on your credit score. A low score can also significantly affect your chances to obtain any new loan in the future.
Luckily, all is not lost. If you approach planning your new debts carefully and start rebuilding your credit, your score will gradually increase. With a proper approach and dependable legal advice, you will be able to turn this situation around in time.
How long does bankruptcy stay on your credit report?
Depending on your specific case and type of bankruptcy you filed for, it will take several years for a bankruptcy to disappear from your records completely. In the case of Chapter 13, for example, it will typically take up to 7 years. In the case of Chapter 7, on the other hand, it can take up to 10 years.
However, there is some good news. Although your credit score will decrease after declaring bankruptcy, you can start repairing and rebuilding your credit almost immediately. This will improve your chances of reaching a good score even before your bankruptcy officially expires.
How to rebuild credit after bankruptcy?
Repairing and rebuilding your credit score are vital aspects of the post-bankruptcy period. To make sure you’re staying on top of the situation at all times, here is what you need to do:
- Make sure to check your credit score attentively from time to time. This is an essential part of handling domestic finances for all individuals, and even more so if you have a low credit score you need to improve.
- Create a budget and stick to it. At the same time, it’s advisable to start building an emergency fund, as well.
- Consider a secured loan, secured credit cards, and co-signed credits or loans. Pay your bills on time.
- Report your timely payments to one of the major customer credit bureaus. However, bear in mind that different credit scoring models may have different rules for evaluating your worthiness of receiving new credit.
Contact Rancho Bernardo bankruptcy experts and rebuild your credit score successfully
Questions like “Will I be able to buy or sell a house after bankruptcy?”, “Can I keep my car if I file a Chapter 7?”, and “How many times can I file for bankruptcy?” are the ones experienced bankruptcy attorneys usually get a lot.
However, questions concerning the correlation between bankruptcy and credit reports are usually the ones debtors are mostly concerned about. The key to rebuilding credit is consistency, and your patience is sure to pay off in the long run.
With proper legal advice, you will be able to control the situation, and even take some time to relax at Lake Hodges. Consult the most reliable bankruptcy lawyers in Rancho Bernardo and start planning your financial future with experts by your side. Call us today, and get the best legal guidance.