You may feel heavily burdened by debt. You have creditors calling you about missed payments all the time. You don’t know how you ever will pay off your mounting debt and move forward. Yet, you are hesitant about seeking bankruptcy relief. You are uncertain about if you should hurt your credit even more by having a bankruptcy on your credit report. How long will a bankruptcy affect your credit if you seek one?
A Chapter 7 bankruptcy will remain on your credit report for 10 years from your filing date. Yet, you can complete discharge tens of thousands of dollars of debt in Chapter 7 bankruptcy. You can get a fresh start and work to rebuild your credit. In a Chapter 13 bankruptcy, your bankruptcy will remain on your credit report for only seven years. It also looks more favorable to lenders because you restructure your debts, instead of discharge them, and pay them off within a three- to five-year period.
You also need to keep in mind rebuilding your credit after bankruptcy isn’t impossible. Here five strategies to take to rebuild your credit:
After four or five years, if you are able to avoid racking up extensive debt, you may see your credit score improve to 700-749, making your ability to get larger loans at lower interest rates easier.
If you are disciplined, you can rebuild your credit after bankruptcy. You truly can start fresh and build toward a better financial future.