Bankruptcy allows thousands of individuals to get out from underneath crushing
debt. While the bankruptcy process does allow consumers to get a fresh
financial start, a bankruptcy can also affect your ability to get new
credit for several years.
Filing for bankruptcy has many advantages. Some people use a Chapter 7
bankruptcy to clear thousands of dollars of medical bills or credit card
debts that they may never be able to pay on their own. Other types of
bankruptcy like a Chapter 13 case can help individuals keep their houses
after they run into trouble with a foreclosure.
Unfortunately, bankruptcies are reported to the credit unions and have
a negative effect on your credit score. A Chapter 7 bankruptcy will stay
on your credit report for ten years. A Chapter 13 bankruptcy will be reported
for up to seven years. In a Chapter 13 bankruptcy, debtors re-pay some
of their debts, which means that these types of bankruptcies are treated
more kindly by the credit reporting agencies.
Depending on the state of the economy, a bankruptcy may not completely
stop you from receiving new credit. When the economy is good and lenders
are willing to extend credit, they may be more likely to overlook a bankruptcy
on a credit report. This is especially true if the bankruptcy case is
several years old.
When a bankruptcy is relatively recent or when lenders on cutting back
on extending new lines of credit, it may be more difficult to get a new
credit card, car loan, or other type of financing. If credit is available,
you may find that the lenders will charge very high fees or interest rates.
In this situation, you should contemplate whether or not getting new types
of credit is worth the price.
If you need help with a bankruptcy, credit reporting issue, or other type
of debt problem, contact Loan Lawyers today. Our attorneys can help you
make a plan for your financial future that fits your individual needs.
To schedule a free consultation, call us today at (844) FIGHT-13 (344-4813).