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How Long Will My Credit Score Suffer After Bankruptcy?

Law Office of Jason Cline June 8, 2022

Petition for Bankruptcy on an office table.Life's financial curveballs can strike unexpectedly and sideline you from paying bills, settling debts, or meeting your other financial needs. When facing severe financial adversity, bankruptcy is among the promising options to remedy your financial condition and achieve debt relief. However, filing for bankruptcy can affect different aspects of your life, including your credit score. A skilled New Mexico bankruptcy attorney can enlighten you about the long-term impacts of bankruptcy on your credit score.

At the Law Office of Jason Cline, I have the diligence, experience, and resources to guide and assist clients in navigating complex bankruptcy procedures. As your legal counsel, I can help you understand how bankruptcy can affect your future, your credit score, as well as how long it may take you to recover. My firm is proud to serve clients across Albuquerque, Los Lunas, Santa Fe, Rio Rancho, or anywhere throughout the state of New Mexico.

How Long Does Bankruptcy Stay on Your Credit Report?

Bankruptcy stays on your credit report for 7 to 10 years, depending on the bankruptcy chapter you file for.

  • Chapter 7: If you file for Chapter 7, bankruptcy will remain on your credit report for up to 10 years.

  • Chapter 13: If you file for Chapter 13, bankruptcy will stay on your credit report for 7 years.

Since bankruptcy will be available in the public records section of your report, potential lenders will be able to see the information there. Though this may result in other financial difficulties, it doesn't stop you from performing credit-related activities.

Does That Mean I Can't Do Anything Requiring Credit for 7 to 10 Years?

No, filing for bankruptcy doesn't stop you from doing anything that requires credit for the period it stays on your report. In fact, you may be able to:

  • Purchase a car within 6 months of filing a Chapter 13 case

  • Purchase a home within 1 to 2 years after filing a Chapter 13 case

  • Buy a car on the discharge of a Chapter 7 case (typically 4 months from filing a case)

  • Buy a house within 2 to 4 years after the discharge of a Chapter 7 case

Essentially, having negative information on your credit report doesn't completely prevent you from buying a car or house. Nevertheless, it is important that you make smart financial decisions to rebuild your credit score and improve your financial situation.

What Steps Can I Take to Rebuild My Credit Score?

Even while bankruptcy still appears on your credit report, you can start rebuilding your credit. Here are some insightful steps to take to rebuild your credit score:

  • Monitor your credit scores from time to time.

  • Review your credit reports annually. Be sure your reports are accurate.

  • Apply for unsecured credit cards that are bankruptcy-friendly.

  • Apply for a secured credit card.

  • Ensure that you are zeroed out.

  • Avoid past mistakes or pitfalls.

  • Take out a credit-builder loan.

  • Watch out for credit card offers.

  • Become an authorized user.

  • Manage reaffirmed debts carefully.

Generally, you can start rebuilding your creditworthiness right away once your bankruptcy case successfully closes or your debts are discharged. An experienced attorney can educate you about how to rebuild your credit score, improve your financial situation, and become credit-worthy.

Experienced Guidance to Protect Your Future

Filing for bankruptcy is a significant decision toward achieving debt relief. However, this can affect different aspects of your life, including your credit score. Bankruptcy can turn a good credit rating into a fair or poor one. Nonetheless, rebuilding your credit score requires maintaining positive financial habits and making smart financial decisions. An experienced bankruptcy attorney can provide you with expert insights on how bankruptcy affects your credit score and help you strategize how to rebuild it.

At the Law Office of Jason Cline, I have devoted my career to offering outstanding legal services and reliable advocacy to consumers in bankruptcy-related matters. As your legal counsel, I can evaluate your unique financial situation and determine which bankruptcy chapter is right for you. I will help complete your bankruptcy forms and guide you through the court proceedings. Also, I will outline effective strategies to help you manage and rebuild your credit score post-bankruptcy, ultimately improving your financial situation.

Contact my firm – the Law Office of Jason Cline – today to schedule a simple consultation with a well-informed bankruptcy attorney. I can offer you the personalized legal counsel and dedicated advocacy you need to navigate crucial decisions in your bankruptcy proceedings. My firm is proud to serve clients across Albuquerque, Los Lunas, Santa Fe, Rio Rancho, or anywhere throughout the state of New Mexico.