what will be my credit score be after bankruptcy.
Wondering what will be my credit score be after bankruptcy. Even if I have to file one, how to improve credit score after Chapter 7 or 13.
Why do you want to go for
Why do you want to go for bankruptcy? It is considered as the last resort to get rid of the debt trap. I would suggest you to approach a genuine debt relief company. You can have a talk with their financial advisors. And they can suggest you the best way to pay off your debt, depending on your debt amount. So, don't file for bankruptcy without any reason. Maybe, you can pay off your debts by debt consolidation or settlement, etc.
However, in case, if you have to file bankruptcy, it's gonna hurt your credit score badly. Chapter 13 bankruptcy is deleted seven years after filing date from your credit report. Whereas, Chapter 7 bankruptcy is deleted from your credit report after 10 years of filing date.
After that time, it's gonna be very tough for you to improve credit score. Some credit unions or creditors can offer you a credit card with high interest rate as they know you won't be able to file for bankruptcy again within a certain time. So, you can charge that credit card for small amounts and always pay off your outstanding balance in full and on time!
Much depends on how much you
Much depends on how much you owe? Bankruptcy is the best option when you can't consolidate or settle your debts. Chapter 7 bankruptcy can help you get rid of debts within 3 months whereas Chapter 13 bankruptcy will give you a 3-year or a 5-year repayment plan. In Chapter 7 bankruptcy, you will lose your non-exempt assets. In Chapter 13 bankruptcy, you'll be on a tight budget for so many years. Can you afford that? Your credit will suffer due to bankruptcy. But you can rebuild it. That won't be a problem. But you won't get a home loan before 2 years.
Your credit score may drop by 200 points due to bankruptcy. But it can also go up if your credit-utilization ratio becomes 0. Both the possibilities are there. Take out a secured credit after getting a bankruptcy discharge. Pay your bills in full every month. It will help you to rebuild credit.
Yes, I agree with Nick.
Yes, I agree with Nick. Bankruptcy is the probable option when you can't consolidate or settle your huge debts. But there are some positive aspects too in bankruptcy. Make sure you pay your bills in full every month and rebuild credit.