If your bills and credit obligations have reached a point where it has become impossible to make payments to creditors and have enough money left to live, you may consider bankruptcy as an option for resolving your credit problems. While more and more people today are filing for personal bankruptcy, many are often worried about the implications it can have on their credit. Below are some important discussions regarding how bankruptcy affects credit.
The biggest myth that our Baltimore bankruptcy lawyers want to dispel is that your credit will be ruined for up to 10 years, during which time you can’t get loans or credit cards. While bankruptcy can stay on your credit report for up to 10 years (Chapter 7) or 7 years (Chapter 13), you can rebuild your credit and even qualify for certain loans after the first few years.
In reality, most people who file for bankruptcy already have poor credit scores. Bankruptcy can actually allow you to improve your credit once your debt is discharged, as long as you take steps to rebuild your credit. If you don’t file for bankruptcy, you will continue being late on payments, further damaging your credit score.
Credit scores can recover with time and proper management. The first thing you can do is apply for credit to reestablish a credit history and demonstrate that you can use credit responsibly.
While your immediate credit score can take a hit after bankruptcy, it is possible to rebuild it with time and consistent payments.
To learn more, contact our Baltimore bankruptcy attorneys at (410) 234-0100.