How Will Bankruptcy Affect My Credit?

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Importance of Credit.

Effect of Bankruptcy on Credit

Understand the impact that filing a bankruptcy case could have on your credit score.  You may be surprised.

Understanding the Interplay Between Your Credit Score and Filing a Bankruptcy Case.

Generally, individuals considering the to file a voluntary bankruptcy petition already have at least some issues with their credit.  Pittsburgh bankruptcy lawyers generally discuss those credit issues during a free initial consultation with their clients.  Especially when it comes to chapter 7 bankruptcy cases, individuals typically consider filing to escape a dire financial situation.  Even consumers who pay their minimum payments on time may have poor credit scores because of very high debt to income ratios.  Often the maxed-out credit cards are accompanied by several late payments.  Worse, many consumers give up on even the minimum credit card payments but still remain reluctant to file a bankruptcy case.

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Filing a Bankruptcy Case Might Actually Improve Your Credit.

The filing of a bankruptcy case is an adverse credit event which, in isolation, might appear to result in a reduction to your credit score.  However, continued default on credit facilities, non-reduction of debt and no exercise of credit could be worse than taking the affirmative step a bankruptcy case to address your financial issues.  A bankruptcy case could be the quickest way to correct a badly skewed debt to income ratio.  Your credit score might also be dramatically improved when certain of your creditors’ claims are retired.  Because there are rarely quick-fixes for credit issues, it is often helpful to consider how your financial condition might change within the next 24 months.

If you’re waiting to find out how your credit score might change after a bankruptcy case, you owe it to yourself to have a free initial consultation with an experienced Pittsburgh bankruptcy lawyer.

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Refusing to File Bankruptcy Could Delay Your Fresh Start.

For consumer debtors, chapter 7 bankruptcy usually means a fresh start after getting a discharge.  The chapter 7 process moves quite quickly in comparison to the timeline of a chapter 13 case.   In chapter 13, debtors  pay a portion of what they owe to their creditors over a period of three to five years.  It doesn’t take long for debtors find that the chapter 13 plan period is not a prison sentence.  When a chapter 13 plan is confirmed it strikes a new deal between a debtor and her creditors.  At the successful conclusion of that chapter 13 plan, debtors are rewarded with a completion discharge (in fact, the chapter 13 discharge is actually more broad than the quick chapter 7 discharge ).

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A Pittsburgh Bankruptcy Lawyer Can Help You Establish Your Path Forward.

For many people in financial distress, the path outward is not entirely clear.  People are sometimes overcome by the weight of their then-present conditions and can’t see forward to a reasonable future as careful stewards of their own assets.  In other cases, people financially incapable of caring for themselves could overcommit to their responsibilities.  For a true idea of of your financial future, please contact us for a free initial consultation.

(412) 925-8194

 

We are a debt relief agency.  We help people file for relief under the United States Bankruptcy Code.  We are proud to have continuously expanded our clients, reach and success rate.   Please contact us if you have a challenging bankruptcy or commercial law concern.  We are excited to review your condition with you.

 

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