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Will Filing Bankruptcy Affect My Credit?

In short, yes. Filing bankruptcy is a serious financial decision that will impact your credit score, but most people who file already have a compromised credit score from not paying bills, so the additional demerit to the credit score is usually not a factor in the decision whether to file or not. Chapter 13 bankruptcy will remain on your credit report for up to seven years; Chapter 7 for up to 10 years. However, a bankruptcy will impact your short-term (two-three years) ability to purchase real estate. Although a perfect 850 credit score will be a long way off, it is possible to build credit back up to a respectable level in a relatively short period of time.

Steps To Building Better Credit

The key to boosting a credit rating back up is to transform your financial habits after bankruptcy. Ensuring your credit report is accurate after filing is very important. Most people with great credit typically have several credit lines, so establishing some solid lines of credit will help raise your score. You can also “piggyback” off of family or friends by being added as an authorized user on their credit cards, reaping the benefits of their solid credit activity. Paying bills in a timely manner, especially on home and vehicle loans, is also very important. Within two or three years, provided you have been honoring your credit obligations, you could be in a better position to receive loans at decent interest rates and will likely be sufficiently creditworthy to qualify for a home loan.

Despite the often overinflated negative perception of the effect of bankruptcy on credit scores, following good credit-building steps after bankruptcy will go a long way toward redeeming your credit score.

Schedule A Consultation Today

If you’re looking for a qualified and trusted Minneapolis/St. Paul attorney, please call Mr. Kelsch at 763-398-1676 or send him an email.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

This website features educational information based on general legal principles in Minnesota. Specific legal advice is contingent upon the unique facts of each case. Therefore, you should not rely only on this information for your particular legal issue. Contact an attorney to obtain advice specific to your legal situation.