Is bankruptcy guaranteed to ruin my credit score? - Bankruptcy Law Questions and Answers- LawQA.com

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Is bankruptcy guaranteed to ruin my credit score?

I have always heard that bankruptcy will affect my credit score pretty badly. Is this always true? Is there anything I can do so that my credit score is not completely ruined after?

Answer By Janet Lawson
Janet A. Lawson Bankruptcy Attorney
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How it affects you differs from person to person. If you are making car and mortgage payments your credit will be rehabilitated sooner than someone who is not making those kinds of payments.

Answer Applies to: California
Replied: 10/3/2011

Attorney at Law
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If your credit is already bad, a bankruptcy probably won't make it much worse.In many cases, fairly soon after getting your bankruptcy discharge, you will find that your credit has actually improved, particularly if you start handling your finances in a responsible manner and start using credit in small amounts - get a credit card after your bankruptcy discharge (you will be surprised how many offers come in the mail), and pay it off every month - don't ever carry over a balance and don't ever charge more than you can afford to pay off when the bill come in.This takes discipline, but it is the only way to rebuild your credit and it works.Also, get a car loan - these are also available, and you may have an easier time getting a car loan after the bankruptcy tnan before, particularly if your credit is already bad.Make your car payments on time, any you will be surprised how quickly your credit recovers. Good luck.

Answer Applies to: Virginia
Replied: 10/3/2011

Mercado & Hartung, PLLC
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BK will have a negative impact on your credit. However, if you pay your bills on time, etc you should see an increase after two years from filing.

Answer Applies to: Washington
Replied: 10/3/2011

Bankruptcy Law office of Bill Rubendall
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Many people have good credit scores before they file bankruptcy. After filing the credit score will go down. It will take a long time for a credit score to improve. Paying your ongoing debts on time is the best way to improve your score.

Answer Applies to: California
Replied: 10/3/2011

Answer By Gary Lee Lane
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
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Yes.

Answer Applies to: California
Replied: 10/3/2011

Answer By J. Thomas Black
Law Office of J. Thomas Black, P.C.
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A bankruptcy is a major derogatory item on a credit report, and does cause a significant drop in a person's credit score. That being said, many people considering bankruptcy have bad credit anyway, so filing bankruptcy is not as bad for them. Also, many of my clients have recovered a good credit score after bankruptcy, if they learned from the bankruptcy, and do not get over-extended again. I have clients that after a year has passed after the bankruptcy, have scores in the mid-600's, and after two years, 700+. But to achieve that, you must be responsible with credit, pay on time, not open too many accounts, and use a small part of your available credit lines.

Answer Applies to: Texas
Replied: 9/30/2011

Answer By Kevin Heupel
Heupel Law
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Bankruptcy does not ruin your credit score. After you file bankruptcy, your credit score will drop 60 points. However, your credit will start to rebuild after your discharge. Most people find their credit score returns to 700 within two years after filing and you will qualify for a FHA home loan after two years. Thus, the rebuilding process is quick and much faster than doing nothing about your debt.

Answer Applies to: Colorado
Replied: 9/30/2011

Answer By Dan Wilson
Dan Wilson Bankruptcy
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Filing BK is a big hit on your credit score, on a par with a mortgage foreclosure. You will be able to get credit after BK, but at very high interest rates. You can reestablish credit by making post-petition payment on debt on a regular basis. A local expert on this is James Spray in Arvada. That said, here is the lecture I give my clients: Using (overusing) credit is what got you into trouble in the first place. Post-bankruptcy you will be on a cash basis. If you cannot pay for it you can't have it. Don't use credit cards. Don't buy a house or car you cannot afford. Go forth and charge no more.

Answer Applies to: Colorado
Replied: 9/30/2011

Law Office of Yvonne Michaud Novak
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Though bankruptcy affects your credit score negatively it is not a permanent mark. It stays on your record for 10 years and during that time you can rebuild your credit by making all of you remaining and new debt payments on time. You will want to make your secured debt payments, like your home and car, on time and that will help rebuild your score. You will also eventually want to get a small balance credit card and make those payments on time. It is better to wait to get a credit card for at least 9 months after your bankruptcy and then only charge what you can repay. While the bankruptcy is on your credit record, it won't prevent you necessarily from getting credit, you just may pay more in interest or have to make a larger down payment.

Answer Applies to: Minnesota
Replied: 9/30/2011

Answer By Darren Aronow
The Law Office of Darren Aronow, PC
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If your credit was bad before you filed bankruptcy, then it will not have much more negative effect. It will recover fairly quickly because you no longer have any debt and because the creditors know you can not file another chapter 7 bankruptcy for 8 years. You will receive credit card applications immediately and will be able to get a mortgage within 2.5 years from discharge (at least under today's mortgage guidelines).

Answer Applies to: New York
Replied: 9/30/2011

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