If you're buried in debt and struggling to keep up with your payments, you may be feeling like bankruptcy is your only option. But before you make that decision, it's important to understand how bankruptcy will affect your credit and finances.
This blog will provide insight into how you can repair your credit status and financial standing after a bankruptcy filing. Read on for tips on making the most out of your bankruptcy, courtesy of our experienced bankruptcy attorneys at The Law Offices Of Mayer & Newton, and remember that with the right information and approach, you can come out of this process stronger than ever.
What is Bankruptcy & What Are Its Effects on My Credit Score?
Filing for bankruptcy is a difficult but sometimes necessary decision that can have negative consequences on your credit score. When experiencing financial hardship, it's important to speak with a bankruptcy trustee to understand all of the implications for creditors, yourself, and your family's financial security.
In the aftermath of bankruptcy, the effects on your credit report will depend upon the type of bankruptcy you seek and discharge. Chapter 7 liquidation bankruptcy typically takes around four months from start to finish and results in immediate damage to your credit score. On the other hand, Chapter 13 reorganization can take up to five years to complete, though it does not usually have as drastic of an effect on your credit score, since payments are made over time. The key to recovering from these repercussions is knowing what steps you need to take after filing for bankruptcy, so that you may eventually rebuild your credit and financial reputation.
What Should I Avoid Doing to Improve My Credit Score Post-Bankruptcy?
Rebuilding your credit score after bankruptcy may be the single most important step to achieving financial freedom in the future. Firstly, understanding the debt repayment process is essential for any post-bankruptcy credit status improvement. To make sure you are making the best steps towards your recovery, it is key to avoid behaviors that would hinder your progress, such as consistently missing monthly payment deadlines or further incurring debt while undergoing the bankruptcy repayment process. Moreover, taking on too much debt or overspending can also cause serious consequences if these issues are not addressed in a timely manner. If you want to be successful in rebuilding your credit score post-bankruptcy, you must stick to a budget and maintain proper discipline in order to strengthen your finances responsibly.
How Long Will It Take to Repair My Credit After Filing for Bankruptcy?
It is essential to keep in mind that the discharge of your bankruptcy papers is not the end of your financial journey, but rather the beginning. The debt repayment process may seem intimidating, but with time and dedication, you can begin to repair your credit status ASAP. Positive results from this endeavor typically take between 18-36 months from when you filed for bankruptcy, since lenders will want to see that you have established a pattern of financial responsibility for an extended period of time. Bottom line: you have to commit to the process in order to make progress in repairing your credit score and restoring your financial standing.
Are There Other Options Available to Help Improve My Financial Standing & Credit Score?
When faced with bankruptcy, it can be difficult to know where to turn, and what options are available to help improve one’s financial standing and credit score. In these circumstances, one must understand the debt repayment process, and familiarize oneself with different ways to repair credit status. While there are many avenues available, such as the use of a consumer protection agency or a financial advisor, the most important way to help restore one’s financial standing is to make payments on time and announce all voluntary repayments. By taking the initiative and researching options, individuals facing bankruptcy will have better choices when it comes to developing a plan for restoring their credit status and finances.
If You Are Facing Bankruptcy, Hire a Skilled Attorney Today
Bankruptcy filings can be intimidating, so it's important to have a support system in place that can help you understand the repayment process. At The Law Offices Of Mayer & Newton, our skilled team of bankruptcy attorneys will assist you throughout the proceedings, so you can take action in repairing your credit score and improving your financing standing sooner rather than later. We’re here to make sure you comprehend your current financial position, understand how debt works, and stay away from delinquent payments in the future. It may take some time for these efforts to yield results and for gradual progress to become visible in your credit score, but the dividends of improved financial health will be well worth your patience and perseverance in the end.
To learn more about the bankruptcy process call The Law Offices Of Mayer & Newton now at (865) 328-7993, or request a free consultation online.