Will Bankruptcy Ruin My Credit?
Posted By Nicholas Westbrook on Jul 30, 2010 12:30pm PDT
During most of my initial consultations, the person sitting across from me asks: "Will filing Bankruptcy ruin my credit?"
The short answer is "Yes." It is common sense that filing Bankruptcy will have an immediate impact on your credit score. What the client is really asking are two questions: first, "How long will the Bankruptcy stay on my credit report?" And second, "How will the Bankruptcy affect my ability to get credit in the future?"
Bankruptcy case information can stay on a credit report for up to ten years. The federal Fair Credit Reporting Act directs reporting agencies to exclude information regarding Bankruptcy from consumer reports ten years after the case is filed. Sometimes a credit reporting agency will remove the information before the expiration of the ten year period.
Bankruptcy is not a financial death sentence. In the short run, a Bankruptcy filing under Chapter 7 or Chapter 13 indicates you are suffering a financial disaster. In the long run, Bankruptcy indicates that whatever financial problems you experienced have been legally resolved by the Bankruptcy Court. Consequently, creditors view recently discharged debtors as good credit risks - and for good reason. A post-discharge debtor will have a good debt-to-income ratio and cannot file Bankruptcy again for several years.
Many of our clients recover quickly after Bankruptcy. Some have purchased new vehicles after the Bankruptcy or even bought a home. This can happen quickly after the Bankruptcy discharge. The most important aspect to obtaining credit after Bankruptcy is demonstrating financial stability and a responsible use of credit.
A Bankruptcy can lighten your debt load and eliminate the destructive effects of unsecured debt, such as credit cards and medical bills. To speak with an experienced Houston Bankruptcy lawyer, please call us today. The Law Office of Nicholas R. Westbrook will explain how a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy can help you and your family. Call (713) 893-6204 for a free consultation. Stop letting debt ruin your life.