Will Bankruptcy Affect My Credit?

Filing for bankruptcy can negatively impact your credit, at least in the short term. However, with diligence and responsible financial management, you can rebuild stronger credit over time. At Gale Angelo Johnson P.C., we not only guide clients through the bankruptcy process, but we also monitor credit reports afterward and offer advice to improve scores. If you are worried about the effects of bankruptcy on your finances, contact us today for a free consultation.

Understanding Credit, Scores, and Reports

There are key differences between credit, credit scores, and credit reports that are important to understand. Your credit represents your ability to borrow money, based on factors like income and debts. Your credit score reflects your creditworthiness, determined by various financial factors. And your credit report gives a comprehensive overview of your credit history, including credit cards, loans, payment history, and any negatives like bankruptcy.

Short-Term Effects of Bankruptcy

When you first file for bankruptcy, your credit score may briefly increase due to reduced debts. However, bankruptcy stays on your report for 10 years, hurting your creditworthiness.

Long-Term Credit Outlook

Though bankruptcy initially damages your score, responsible financial habits can lead to recovery within 2 years post-discharge. 

Comparing Chapter 7 and Chapter 13

Both types of bankruptcy remain on your report for a decade, but Chapter 13 may be viewed more positively by creditors since filers repay some debts through a structured plan, demonstrating financial responsibility.

Rebuilding Credit Post-Bankruptcy

At Gale Angelo Johnson P.C., we help clients monitor credit reports closely after bankruptcy to ensure accuracy. Contact us today to get started on the road to financial restoration.

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