How Does Bankruptcy Affect My Credit Score?
Many considerations go into play when one considers bankruptcy as an option for getting out from under the oppressive weight of debt. One of the biggest considerations is how it affects credit scores, because your score has never been more important than it is today.
Credit scores can determine the cost of future purchases. For instance, lenders and insurance agents will look at your score and determine what they can offer you, and if you’ve filed for bankruptcy, you’re not going to get the kind of deal a person with better credit scores can achieve. Credit scores are important when buying a house, obviously, but they also matter to property management as you apply to live in an apartment or condominium. Finally, credit scores can even come into play when you apply for a job, particularly if the position is in finance.
If you’re considering bankruptcy as an option but don’t want the stigma attached, think about what you’ll do to your score if you continue to make late payments (or no payments) on your overdue credit cards and other debts. The result could be the same or worse compared to what happens when you declare bankruptcy. Seeking counsel on the matter is advised.
- There is no way around it – bankruptcy will hurt your FICO® score. FICO® takes into account the scores from three credit bureaus – Equifax, TransUnion, and Experian. Every case is different, so there isn’t a blanket answer for how much your credit scores will drop after bankruptcy.
- Chapters 7 and 11 bankruptcies will stay on your credit report for up to 10 years. Chapter 13 bankruptcies will remain for seven years, but in some cases can last as long as 10 years.
- You might see an influx of credit card offers after bankruptcy, but be aware that these often come with low limits and high interest rates. Many of these credit card companies will target you with products that have high annual fees. Be sure to review the terms of the offer carefully before you submit.
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Szabo Law Group is committed to providing personalized legal help to those in need of immigration services in Ft. Lauderdale and greater South Florida. As an immigrant from Hungary himself, our principal attorney- Aron T. Szabo- empathizes with fellow immigrants, and understands how troublesome it can be to face an unsure residency or work status. Our firm provides individualized counsel for all immigration needs. Szabo Law is a dedicated advocate for our friends and neighbors in the immigrant community.