Credit scores are an important part of a healthy financial life. Your score affects your ability to buy a house or a car, and the interest rates on your credit cards are heavily influenced by your credit score. Many people are concerned that bankruptcy will do irreparable damage to their credit score.
If you are filing for bankruptcy, your credit score has most likely already been harmed by excess debt, late payments, nonpayments and perhaps foreclosure. While the initial filing will have a negative impact on your credit, bankruptcy is designed to help improve your credit score in the long term.
With more than 30 years of experience, I help clients get started rebuilding their financial lives through bankruptcy. As a California bankruptcy attorney, I work closely with each client. My services are tailored to each client's individual needs because no two people and no two bankruptcies are the same.
If you have questions about your credit score in bankruptcy, please arrange a free consultation with me by calling 626-389-8575 or toll free 888-368-8941. You can also contact me online.
Understanding Your Credit Score
When you visit my office, I will sit down with you and explain the details of your credit score and how you can improve it. In general, five factors determine your score:
- Payment history
- Amount of outstanding debt
- Length of credit history
- Recent credit inquiries
- The types of credit you use (mortgage debt is "better" than store credit card debt, for example)
How Bankruptcy Can Help Restore Credit
Chapter 7 bankruptcy: If you cannot pay back debts, even at 0 percent interest rates, you may qualify for Chapter 7 bankruptcy, which will eliminate your debt and give you a "fresh start." A Chapter 7 filing will erase a poor payment history and give you a blank slate on which to start rebuilding your credit. After bankruptcy, you can improve your score by making wise financial choices and paying your bills on time. Though a Chapter 7 filing appears on your credit report for 10 years, your credit is not impacted for that entire time. Many individuals are able to get a mortgage within two years of the filing.
Chapter 13 bankruptcy: If you have the ability to pay your debts but high interest rates or a change in income prevent you from fully meeting your obligations, Chapter 13 bankruptcy can help you regain control of your budget. Chapter 13 will put you on a payment program for three to five years, and if you make your payments on time, you will see your credit score improve. Chapter 13 has the added advantage of allowing you to keep your house, which has a positive impact on your credit score.
The choice of which type of bankruptcy to file is sometimes difficult. I am ready to evaluate your situation and help you make the right decision.
Contact a Pasadena Eliminate Debt Attorney
To schedule a free consultation to discuss your unique situation, please call 626-389-8575 or toll free 888-368-8941. You can also contact my law firm online.
Pursuant to 11 U.S.C. section 528(a)(4) of the bankruptcy code, we are required to state: we are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
