Carrying on with the struggle of paying routine bills and/or outstanding debts can only damage the credit, or in the worst-case lead to filing a bankruptcy. Consulting a bankruptcy lawyer in Cleveland can help you determine the appropriate way forward and ease out your stress.
It is a known fact that bankruptcy causes serious damage to your credit score. According to the information released by FICO, a bankruptcy can rob off about 240 points for someone with a credit score of 780 credit score and 150 points for a credit score of 680. In both cases, whether you have a good or bad credit score, the final credit score hovers around 540 or 530. Remember, however that FICO information does not depend on the type of bankruptcy you file.Your Cleveland bankruptcy attorney can determine the exact effect on your credit score upon examining your individual details.
Chapter 13 bankruptcy stays for up to seven years on your credit report. The discharged debts also figure on the report for about seven years after their discharge. Remember, many debts remain active till the time they are discharged in Chapter 13 bankruptcy. So, it is likely that your report mentions discharged debts for a longer period than the bankruptcy.
Chapter 7 bankruptcy usually stays on your report for upto ten years. All debts listed for Chapter 7 bankruptcy get discharged within a few months of filing. So, they cease to exist on the report earlier than the bankruptcy. Usually, after seven years, the discharge debts no longer find mention on the report.
Almost all lenders consider credit score before extending credit. And, with a bankruptcy listed on the report, qualifying for an auto loan, home loan, or credit cards becomes more difficult. Depending on whether you file Chapter 7 or Chapter 13 bankruptcy, some creditors may be willing to work with you.It, however, cannot be said with certainty which bankruptcy will find favour with the lender as each has its own qualification criteria.
Initially, after bankruptcy, your credit score will take a severe beating. But, with passage of time the items associated with bankruptcy become old and have diminishing effect on your credit score. It then becomes your responsibility to rehabilitate your credit by practicing good financial hygiene. Consult a reputed Cleveland bankruptcy law firm such as Rubinstein Law Firm for assistance on best financial practices after bankruptcy. Generally, paying your bills and debts on time and monitoring credit report regularly, can help you qualify for most credits within two years of discharging bankruptcy.
However, it is recommended that you wait for at least six months after the discharge of bankruptcy to pull out copies of your credit report. Get your bankruptcy lawyer in Cleveland to critically review your report such that all discharged debts are marked with “included in bankruptcy.” In case, there is an exclusion, the debt will reflect as a negative item on the report and can lower the score. Dispute the errors immediately and have the report corrected.