How Will Bankruptcy Affect My Credit?

Business & Bankruptcy Attorney in Danville & Lebanon, Kentucky Serving All Nearby Areas

Posted: February 22, 2018

If there's one question our Danville bankruptcy attorney hears more than anything else from potential clients, it's: “Will bankruptcy make it impossible for me to get credit? Will my credit be ruined forever?”

These are fair and reasonable questions. The vast majority of us can't make our way in the world withoutdanville-bankruptcy-lawyers_0.jpg ready access to credit: car loans, credit cards, mortgages. These are things we need to live the life we want to live. Anything that threatens access to credit is thus pretty scary.

Our bankruptcy attorney can help you through the process and find ways to enable you to live reasonably during and after bankruptcy. Having an experienced lawyer on your side is truly invaluable during the bankruptcy process.

Bankruptcy and Your Credit

So, here's the cold reality: bankruptcy will negatively affect your credit. In terms of quantifying that effect, a bankruptcy will usually decrease your credit score between 150 and 200 points. And there's no sugar coating things – that's a tough blow. It's enough to turn good credit into poor credit.

Now, here's the good news: bankruptcy doesn't ruin your credit forever. Your life isn't over after bankruptcy. You'll still be able to get a car loan, a credit card and even a mortgage, it just may take a little longer.

Chapter 7 bankruptcy will stay on your credit report for up to 10 years, and chapter 13 bankruptcy will stay on your report for up to seven years.

To a very large extent, the best cure for bankruptcy and its effect on your credit is time. If you're patient, if you work at your credit and make sure you carefully and punctually pay off any new debts, you can restore your credit.

Here are some steps you can take after bankruptcy that can ease the process of restoring your credit:

  • Check your credit score regularly – make sure your debts are disappearing when they're supposed to
  • Re-establish your credit ASAP – a history of successful re-payments is what a good credit score is all about. So look for secured credit cards, car loans or other easier to acquire forms of credit – but only when you know you can afford them.
  • Keep your older accounts active – the longer an account is active and in good standing, the more impact it will have on your credit score

Finally, one of the best things you can do for your financial future is to talk to our bankruptcy attorney about your case. No lawyer can guarantee you a specific result from your bankruptcy, but a good, experienced attorney can play a significant role in minimizing the damage from a bankruptcy filing.

If you live in or around Danville, Kentucky and you need an experienced bankruptcy attorney, please call William R. Noelker Attorney at Law, PLLC today at 859-329-3992 for a free consultation.