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South Florida Bankruptcy Attorneys

How will bankruptcy affect my credit?

An individual’s ability and willingness to meet his or her financial obligations determines creditworthiness. All creditors use different criteria, and having a bankruptcy on your credit report is usually only one factor used in deciding your creditworthiness. So there really is no definitive answer as to how bankruptcy will affect your credit, because every creditor has unique methods of analyzing different aspects of a consumer’s file. A bankruptcy’s impact truly depends on the creditor and your specific situation.

Although this might sound strange, simply having a bankruptcy on your file does not necessarily mean that your credit will be worse.  You might actually be in a better position to pay your bills and you might even be considered more creditworthy after you have received a discharge in bankruptcy. That’s because bankruptcy wipes out your old debts, resulting in zero balances on your credit report. Another reason is that after you file for bankruptcy you are prevented from filing a subsequent bankruptcy for a number of years. Seeing that they are protected from another bankruptcy for an extended period of time, some creditors will regularly issue new credit to individuals who recently finished a bankruptcy case. Indeed, you can likely get credit even before your bankruptcy matter is completed. The real issue will probably be what interest rates and fees you will have to pay and whether you can manage the monthly payments so as to avoid beginning a new cycle of painful financial problems.

Regarding your credit score specifically, it’s also important to keep in mind that your score might already be quite low if you are behind on your bills. In many instances, bankruptcy does not lower a score by much, if at all, because a bankruptcy’s potential harm to your score can be outweighed by the tremendous positive effect wiping out both debt and numerous delinquent accounts can have.  There are many scenarios in which filing for bankruptcy actually can raise your credit score!  One of the software programs we use can help predict what your score will be after you receive a discharge and we regularly see increases in scores after bankruptcy. One thing that is certain is that bankruptcy will stay on your credit report for 10 years from the date it was filed, according to 15 U.S.C. §1681(c). Regardless of your credit score, it is important to keep in mind the tremendous benefit to your and your family’s emotional and financial well being that come from seeking relief, with an experienced lawyer by your side, from the United States Bankruptcy Code.

After your case, discharged debts should be listed on your credit report as having a zero balance, signifying that you don’t owe anything on that debt. It can adversely affect your credit score and make it harder to get loans if a discharged debt is incorrectly reported as still having a balance owed. That means it’s a good idea to review your credit report after your bankruptcy is completed and we’ll give you all the tools you’ll need to follow up to get free credit reports.  Also, if we find a discharged debt that reappears, also known as “zombie debt”, we’ll help you file a lawsuit to fix your credit and get money for you for a “discharge violation.”  We are extremely aggressive in this regard and love to help clients recovery money before, during or after bankruptcy for creditor violations of all kinds!

If you have questions regarding credit issues or any other matters pertaining to bankruptcy, call us today at 754-400-5150 or contact us online for a FREE CONSULTATION.  Our country’s history is filled with examples of people who have struggled financially but have gone on to become famously wealthy.   They all reclaimed their part of the American Dream and we want to help you reclaim yours!  Let the lawyers and staff of the Law Offices of Evan M. Rosen, serve you!

More information on Bankruptcy in Florida:

We are a debt relief agency.  In addition to other legal services, we help clients file for the bankruptcy relief under Bankruptcy Code.