Many people fear that filing for bankruptcy will be a permanent black mark on their credit rating. They may avoid bankruptcy in the hope that they will be able to salvage their creditworthiness but instead end up digging themselves further into a financial hole. In truth, a bankruptcy filing has only a temporary effect, and one that is less grave than imagined.
A bankruptcy stays on your credit report for 10 years after a Chapter 7 liquidation and for seven years after a Chapter 13 reorganization. However, the fact that a bankruptcy appears on your report does not mean your credit is adversely impacted for that entire time. It is possible for people to obtain a mortgage in as little as 12 to 24 months after bankruptcy. Our Houston attorneys have worked with several local mortgage companies to make this happen for our clients.
One reason why bankruptcy does not necessarily affect your credit for the full seven or 10-year period is that creditors are realistic. They know that a person who seeks bankruptcy protection is trying to be responsible with their debt and improve their financial position. They also know that a Chapter 7 gives people a clean slate upon which to start rebuilding their creditworthiness. Once your debts are discharged, you will likely have a better ability to pay bills in the future, making you a reasonable credit risk.
After your bankruptcy discharge, there are a few useful steps you can take to repair your credit:
At the Law Office of David A. Fernandez, P.C. we help people deal with crushing debt and clean up their credit histories. Our Houston attorneys can evaluate your situation and help you get your credit report in order. Get a free, no-obligation consultation with our lawyers by calling 713-893-8509 or contact us online anytime.
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