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

Can Filing for Bankruptcy Improve Your Credit Score?

Filing for bankruptcy will not improve your credit score. At least not in the short run. In fact, filing for bankruptcy will have the opposite effect on your credit. But over time you can increase your score well beyond what you could if stay saddled with debt.

How does bankruptcy’s effect on your credit?

Will Bankruptcy Make My Credit Score Go Up?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.

Short and long term effect of bankruptcy 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
  • lawyers
    5.0/5.0

    Mr. Fields and his team of lawyers are the absolute best. They were professional, responded quickly to any emails or phone calls that I made and they worked quickly to get the ball rolling on things. They also made me feel so comfortable and welcomi...

    Read more

    Client

  • lawyers
    5.0/5.0

    My experience during this process was great! Jeff Field & Associates helped me every step of the way and was there if I needed their assistance.

    Read more

    Client

  • google
    5.0/5.0

    I would like to thank Jeff Field & Associates for their help with filing Bankruptcy. This was one of the hardest decisions that I have had to make. They walked me through the process and no matter what questions I had they answered them. They mad...

    Read more

    Rhonda Hays

  • google
    5.0/5.0

    This was a hard thing to do but Chris made it easy and explained everything in a way I understood the process. I would recommend anyone having to go through this to contact this office! Casey was great as well and the communication kept the whole tim...

    Read more

    Beth Carlin

  • google
    5.0/5.0

    The staff made a very stressful situation much easier to cope with. They treated me with kindness and respect. Chris and Laura are very professional and knowledgeable.

    Read more

    Anita York

See all reviews
Contact us

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

Quick Contact Form