When it comes to filing for bankruptcy, there are numerous things to consider and the decision can feel like a difficult one without all of the information. However, bankruptcy may in fact be the best decision for you when it comes to an exuberant amount of outstanding debt where there is no end in sight. The Law Office of Brent M. Myer, PLLC is here to answer any questions you may have about bankruptcy.
One of the many questions often asked during a bankruptcy consultation is how will filing bankruptcy affect my credit score. Many often thought that bankruptcy filing would ruin wrong credit score. But a study by the Consumer Financial Protection Bureau found that was not the case.
CFPB Report on Bankruptcy and credit scores
The CFPB did a study of bankruptcy filings from 2001 to 2018. Among the findings were some surprises with regard to how credit scores are impacted by a bankruptcy filing. The credit scores increase the same year the bankruptcy is filed. Further, credit scores increase from year-to-year after filing bankruptcy. And, credit scores increase more quickly following a Chapter 7 Bankruptcy than a Chapter 13 Bankruptcy. So contrary to what many believed, a bankruptcy does not cause the credit score to go down!
Improve your credit score post-bankruptcy
Check that your debts are reported accurately to the credit bureaus. You can obtain a free credit report from each bureau at www.annualcreditreport.com. Pull a credit report after the bankruptcy to make sure the debts are being reported correctly. Credit scores are based upon the credit reports. And, credit bureaus make mistakes. Report errors to the credit bureaus so they may fixed. Such actions will help improve your credit score.
Establish a positive credit history. Your credit score is based upon a number of factors including your credit history. A positive credit history established after the bankruptcy will help improve your credit score. Timely make payments on your reaffirmed debts. You also may acquire a secured credit card to show that you can successfully make on-time payments with a credit card month over month. These consecutive on-time payments help a new, positive credit history.
The Law Office of Brent M. Myer, PLLC located in Stuart, FL handles both Chapter 7 and Chapter 13 bankruptcy cases for residents in the South Florida area. If you are trying to decide if bankruptcy is right for you, if may be time to contact The Law Office of Brent M. Myer, PLLC to answer any questions you may have from specifically what each chapter means for you to how bankruptcy may affect your credit.
To schedule your free consultation please contact The Law Office of Brent M. Myer, PLLC today!