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How Long Does A Bankruptcy Affect Your Credit?

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).