No matter how dire their financial situation has become, too many people put off filing bankruptcy until the last possible minute. Debt collectors are calling and creditors are threatening lawsuits, but they resist until a wage garnishment or bank account freeze forces them to call a bankruptcy lawyer.
The reason for holding off? They’re worried about the impact on their credit score.
On one hand, this anxiety is understandable. Your credit score dictates whether you can buy a home, get a personal loan, and receive other advantages that accompany a good credit rating. On the other hand, if your debts are in arrears, your cards are maxed out, and creditors are calling, your score has probably sustained enough damage. Bankruptcy can help you overcome that crushing debt burden and rebuild.
What Happens to Your Score After Bankruptcy?
It’s difficult to predict exactly how much your credit score will decrease after you file, although the studies below can give you a general idea.
It appears that the higher your score is at the time of filing, the harder your credit will be hit by a bankruptcy. In addition:
Now For Some Good News About Bankruptcy and Your Credit Score
While bankruptcy can appear on your credit report for years, the impact will diminish as time passes. Once you get your discharge and your finances are in good shape once again, focus on rebuilding your score by:
It’s more than possible to enjoy a good credit rating after bankruptcy: many people have done it. Once you fulfill the terms of your bankruptcy and demonstrate financial responsibility with new credit, you’ll be on your way
Contact a California Bankruptcy Attorney
If the pandemic or another crisis has left you unable to both pay your bills and meet your living expenses, reviewing your options with a California bankruptcy attorney can help. At Hedtke Law Group, we understand what you are going through and will give you the right advice for your circumstances.To schedule a confidential consultation, call us today at (909) 579-2233.