Chapter 7 bankruptcy is the most common form of bankruptcy that erases the majority of an individual’s debt. Chapter 7 bankruptcy is so common because the process from filing to discharging debt only takes about 3 to 6 months. Although bankruptcy can be extremely helpful for families who are overwhelmed with debt, many people choose not to file because they fear the effects that bankruptcy will have on their credit score. However, the truth is that leaving your debts unpaid will cause even greater risks and repercussions to your credit score and your family’s financial situation than filing for bankruptcy.
How Long Does Chapter 7 Bankruptcy Remain on Your Credit Score?
A Chapter 7 bankruptcy will stay on your credit report for 10 years; however, in most cases, this doesn’t affect your ability to get new credit and move on with your life. Many debtors start receiving start credit card offers shortly after they receive their discharge. Credit card companies realize that you are more likely to pay back your debts after bankruptcy due to your discharge situation.
Rebuilding Credit After Chapter 7 Bankruptcy
Although it is likely that you will receive new offers for credit after your debt discharge, it is vital to be cautious of this offers. Many new credit card offers will have low limits and high-interest rates, so it is important to review the offer terms carefully before signing up for a new credit card after bankruptcy.
The best option to rebuild your credit is to open a secured credit card from your bank. A secured credit card is a type of credit card that is backed by a secured payment used as collateral on the account. This is a great method to rebuild your credit because your payments are typically reported on your credit.
Seek Guidance from Our Texas Experienced Bankruptcy Attorney!
If you’re concerned with your financial situation and you’re worried about how you will rebuild your credit after declaring bankruptcy, you can get the help and guidance you need from an experienced Texas bankruptcy lawyer. At the Huebner Law Firm, we understand that it is difficult to be financially overwhelmed while trying to provide for your family. We can help you discover a path to financial freedom.Become financially free by contacting us today at (817) 576-1889 for a consultation!