Many people have concerns about bankruptcy and its impact on their future. In fact, it’s one of the most common concerns we hear, and one of the most popular reasons why people who can truly benefit from bankruptcy are often hesitant about filing. Because there are a lot of myths and misinformation surrounding the impact bankruptcy has on your future, our Union County bankruptcy lawyers want local residents to have the factual information they can use to make informed decisions about their financial future.
In short, bankruptcy will impact your credit – but the effect is in no way ruinous or permanent. Although circumstances can vary from case to case, bankruptcy may impact credit as follows:
- Chapter 7 bankruptcy can remain on your credit report for up to 10 years.
- Chapter 13 bankruptcy can remain on your credit report for up to 7 years.
In many cases, by being proactive and practicing responsible credit behavior, people who have filed bankruptcy are able to rebuild their credit scores – often to scores higher than they had before filing! The key is to use bankruptcy as a financial fresh start and take active measures to improve your credit, including:
- Monitor your credit – you have the right to obtain a free copy of your credit report each year from three nationwide credit reporting companies. Take advantage of this to monitor your credit and the debts or obligations that can help it improve.
- Reestablishing credit – reestablishing credit can be achieved with secured credit cards, small-limit cards, store credit cards, and small loans. Be sure that you are making informed decisions about credit and are not simply creating more debt.
- Keep old accounts active – keep older accounts active when it is possible. This can help maintain the length of your credit history.
The U.S. Bankruptcy Code was created to help good people who have fallen on hard times, not punish them and make their lives more difficult. As such, the process and its impact are designed to allow individuals and families to work toward better credit scores and brighter financial futures.
At Bridges, Jillisky & Streng, LLC, our legal team takes the time to address all questions and concerns with our clients. We make it a point to provide the personalized representation clients need to make sound decisions about their finances and debt relief actions like bankruptcy. If you have questions about bankruptcy, contact us for a FREE consultation.