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Little Falls, NJ 07424

Creditor Score – Affects of Bankruptcy

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Many financial experts tout a significantly lower credit score as the main reason for people needing to avoid filing bankruptcy.    Not everyone sees a big drop in their credit score after their paperwork goes through the courts.

Filing bankruptcy is not the issue with a credit score.

  • In fact, a person’s individual circumstances determine how much his or her credit is affected by their bankruptcy filing.

Although, the exact formula that each credit bureau uses is a closely held trade secret.

Nonetheless, it can be difficult to exactly predict how far a credit score will fall.    People who close only one or two accounts will often see their score drop less than someone who closes multiple credit card accounts.   If an individual still has some credit being extended to them, it usually means that creditors have noticed improvement in payment history.

Even if your score does not fall significantly, a note is placed on your credit report that states you have gone through a bankruptcy. All potential creditors will be able to see that you have gone through a bankruptcy.

However, having a bankruptcy listed for you can be a positive since you are starting with a clean slate.

Many of my clients tell me that they receive offers for credit cards, even before their bankruptcy cases are over.    As long as your bankruptcy case is over, clients are able to obtain vehicle loans.

Waiting Tmes to File another bankruptcy.

As an example:   If you file a Chapter 7 and it is completed, you need to wait 8 years to file another Chapter 7.    This delay in refiling encourages creditors to offer credit since you cannot file for a long period.    Your credit score improves as you obtain credit.   As I mentioned above, my clients advise me that credit is not an issue after their bankruptcies are completed.

If you would like to file another bankruptcy which you filed as a Chapter 11 or 13, contact me.   I will review your circumstances and determine your eligibility to file again.   Debt relief is available.   I am here to help you improve your financial situation.    Contact me today.