One of the biggest concerns individuals have when they are considering filing a Chapter 7 or Chapter 13 bankruptcy is how it will impact their credit score. While filing a personal bankruptcy will negatively affect your credit rating, it may not be as significant as you might think. If you have a history of late or missed payments, collection activity, or lawsuits filed against you, your credit score has already been damaged. Thus, the bankruptcy notation on your report won’t be as damaging, especially when compared to the financial relief it can provide when you eliminate the majority of your debt.
There is a difference in how long a Chapter 7 and Chapter 13 case remains on your credit report. If you file a Chapter 7, it remains on your credit report for 10 years from the date your bankruptcy was filed. Although this is a long time, a Chapter 7 filing is the most comprehensive and quickest means for handling your debt. As soon as you obtain your discharge order you can immediately start working to rebuild your credit score.
If you file a Chapter 13 case, it will remain on your credit report for seven years from the date your bankruptcy case was filed. A Chapter 13 filing is removed from your credit report faster than a Chapter 7 because the debtor pays a portion of what is owed to the creditors under the Chapter 13 plan over a period of three to five years. A Chapter 13 usually does not negatively impact your credit rating as much as a Chapter 7 case.
If you are struggling financially and wondering if filing a bankruptcy case is the right decision for you, let us help. We will review your individual situation and help you understand the pros and cons to each type of personal bankruptcy case. We will also help you consider any other available debt relief options.
If you are considering filing a bankruptcy and you need help determining which type of filing would be best for you, contact Fitzgerald & Campbell to schedule an appointment. We do not offer just one debt relief option, we don’t push you in one direction. If bankruptcy right for you, we will tell you. If it’s not, we will tell you that. If bankruptcy is your get out of debt plan, it needs to be done right. It needs to be in the hands of experienced lawyers who have been there before. Contact us today!