Search Site
Menu
Can Filing for Bankruptcy Improve Your Credit Score?

Can Filing for Bankruptcy Improve Your Credit Score?

There’s no sugarcoating it: filing for bankruptcy will likely cause your credit score to decrease significantly — at least in the short term. You could see your score decline by 120 to 200 points, negatively affecting your ability to get loans and/or advantageous interest rates.

It’s also worth noting that a Chapter 7 bankruptcy will remain on your credit report for 10 years, while a Chapter 13 will remain for seven years. However, the impact of bankruptcy fades away with time, and it’s certainly possible for you to regain financial stability and gradually raise your credit score once again.

Bankruptcy’s effect on your credit

Bankruptcy will have an inescapably devastating initial effect on your credit score. It is difficult to predict exactly how much of a hit you can expect to take, as credit scoring agencies do not publicly release their formulas.

You stand to suffer the most if you have a good credit score and file for bankruptcy. If you already have a bad credit score, there’s not much you have to lose from a credit perspective in filing for bankruptcy.

Still, there are some potential positive effects. In the short term, you can clear some of your delinquent account reports off your credit record, meaning they will no longer count against your score. You can also improve your debt-to-credit ratio because you will instantly discharge some of your debts.

In the longer term, you have the opportunity to start from scratch in filing for bankruptcy. You can set up a sound budget and stay disciplined to lay the foundation for good credit over time. It will take several years, but you can gradually increase your credit score in a way that would have been impossible while saddled with the debts you discharged in bankruptcy.

For more information on what you can expect to happen to your credit score when you file for bankruptcy in Georgia, speak with a trusted bankruptcy attorney at Jeff Field & Associates. Give us a call at 404-381-1278 or contact us online to set up a free initial consultation.


Related Posts:


 

Leave a Reply

Your email address will not be published. Required fields are marked *

Videos
Our Attorneys
Client Reviews
  • google
    5.0/5.0

    Higlhy professional firm. Jeff Field and Associates did whatever they said they would do. Very well versed in this type of law and their customer service is great. I highly recommend them.

    Read more

    Roy Naturman

  • google
    5.0/5.0

    I would definitely recommend Jeff to anyone filing for bankruptcy. He was very nice. He lets you know what's going throughout the process. Thank you Jeff. Athens, Ga.

    Read more

    Anita Craig

  • google
    5.0/5.0

    I am so glad I chose this firm for my bankruptcy journey. Everyone there is so friendly and helpful and made me feel so much better about the entire process. They made everything so quick and simple and now I can have a fresh start. I would absolutel...

    Read more

    Andrea C

  • google
    5.0/5.0

    Jeff Field and staff provided excellent services. The team was always there to answer questions and made the process, during this difficult time, simple and uncomplicated. He is a real professional and true credit to the law field.

    Read more

    Satisfied Customer

  • yellowpages
    5.0/5.0

    Jeff Field and staff provided excellent services. The team was always there to answer questions, responding to every email and call that I had questions and concerns about and I got answers, making this process, during a difficult time, straight forw...

    Read more

    Satisfied C.

See all reviews
Contact us

Please fill out the form below and one of our attorneys will contact you.

Quick Contact Form