Rebuilding Your Credit After Bankruptcy in Morristown
Morris County Debt Relief Attorneys with 30+ Years of Experience
Credit scores have become vital elements of our financial agency. As a result, many people struggling with unmanageable bills try to avoid debt relief methods because they worry that bankruptcy will make future borrowing impossible.
The idea of bankruptcy forever destroying your credit is one of the most pervasive myths surrounding bankruptcy. Our experienced debt relief attorneys at Ast & Schmidt, P.C. are here to help you understand why a Chapter 7 or Chapter 13 petition can begin to improve your credit, rather than destroy it. If you have completed a bankruptcy, we can help you understand how to improve your credit score.
You will have a variety of methods through which to rebuild credit, and bankruptcy can serve as the fresh start you need to begin this process. Our team is fully prepared to help you navigate every aspect of life after bankruptcy.
To learn more about improving your credit score after bankruptcy, call our Morris County debt relief lawyers at (973) 363-2260 today.
How Bankruptcy Affects Credit Scores
Individuals generally do not pursue debt-relief options until their financial situations are dire. This means their credit scores are likely already damaged and may not be reduced further by a bankruptcy.
Bankruptcy impacts high credit scores more than lower credit scores. Additionally, filers with low debts and few accounts to include will see less of an impact on their score than those filing a more complex bankruptcy.
How Long Can it Take to Rebuild Credit After Bankruptcy?
The time it takes to restore your credit score after your bankruptcy can vary widely. With the right steps and dedicated work, you can often improve your credit score within 12 to 18 months after bankruptcy.
The weight attached to bankruptcy by credit-reporting agencies like TransUnion, Experian, and Equifax generally falls about two years after you complete your bankruptcy. Your scores may even increase when the court eliminates large amounts of debt and you reduce your monthly expenditures.
Securing Credit After Bankruptcy
While banks may not extend credit to you while your Chapter 7 bankruptcy petition is pending, many are happy to extend credit as soon as your case is finalized and your debts are discharged. If you pursue a Chapter 13 bankruptcy, you may even receive permission from the court to take out a car loan or mortgage while you are still making payments under your repayment plan.
Do you need a home loan? The Federal Housing Administration may allow you to extend your real estate loan after making Chapter 13 payments for at least one year. If you file for Chapter 7 bankruptcy, you may qualify for an FHA loan two years after your case is dismissed.
Make Decisions Based on Facts—Not Myths
When individuals avoid debt relief options in an attempt to protect their credit scores, the only winners are the banks. Bankruptcy, however, allows debtors to obtain a fresh start, rebuild credit profiles, and construct strong, long-lasting financial foundations. Do not let pressure from creditors, negative stereotypes about bankruptcy, or anxiety about your future prevent you from regaining control over your finances today.
If you wish to get to the bottom of the misconceptions surrounding bankruptcy, please contact our law firm online or schedule a free initial consultation with one of our Morristown lawyers by calling (973) 363-2260 today.