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While bankruptcy allows you to get rid of your debt, it harms your credit score badly. However, having a lot of debt also does the same to your credit score. The situation is not that bad, as you can rebuild your credit score in over 12-18 months after getting the bankruptcy discharge. However, it would help if you took adequate measures to get the desired results. Since bankruptcy cannot be removed from your credit report, you need to consistently work hard to improve your credit score from bad (less than 579) to fair (within 580-66) to eventually good (670-739) and very good (740-799). You would require some more time for an excellent credit score (800-850).
A chapter 13 bankruptcy stays on your credit report for seven years after the discharge, while a Chapter 7 bankruptcy stays on your credit report for ten years. A bankruptcy filing can affect your ability to get a car loan, buy a house, get credit at reasonable rates, etc. However, there are other options available. These include opting for a secured credit card or having a co-signer with good credit. After taking the proper steps, most people can improve their credit score within a year. Since most of your debts are discharged, you can start rebuilding your credit with small and easy steps. These include:
- Obtaining free credit reports to check the balance is zero. Taking essential steps to ensure the same if that is not the case.
- Repay student loans or any non-dischargeable debt to rebuild your credit.
- Get a secured credit card and use it to pay for essential purchases.
- Plan to pay as much as 70% of the credit limit on any credit card you still have. Avoid getting a new credit card unless you can make the payments.
- Clear of your secured debts like car loans or mortgages.
There are chances that the bankruptcy information shows incorrect financial statements. It is important to rectify any mistake made in these documents to rebuild your credit. You can ask your bankruptcy attorney to help with this incorrect information. If you are contemplating a bankruptcy filing, call 888-297-6203 or visit https://www.recoverylawgroup.com/bankruptcy/ to discuss your options with experienced bankruptcy lawyers in Dallas.