Sudden debt can happen to anyone, but there’s always a way to find relief. At H. Lehman Franklin, P.C., we’re a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code. We provide federal debt restructuring help.
However, bankruptcy can affect your credit, so it’s good to be prepared for such impacts. To show Georgia residents how long bankruptcy stays on their credit, we’ve put together this helpful guide.
What Effect Does Bankruptcy Have on Your Credit?
Bankruptcy can have a major effect on your credit score, although how significant that impact is can vary from person to person. In many cases, people can expect a loss of around 200 points from their credit score, particularly people who are sitting at higher credit scores when they declare bankruptcy.
If you have a lower score under the 600 range, you can expect a loss of around 130 to 150 points. It’s important to properly plan for bankruptcy, but the good news is that your credit score will eventually recover.
How Long Does Bankruptcy Last on My Credit?
If you’re wondering how long bankruptcy will remain on your credit history, it really depends on what form of bankruptcy you declare.
- If you choose Chapter 7 or Chapter 11 bankruptcy, this will stay on your credit report for 10 years from when you file. After 10 years, your credit score will raise due to the removal of the bankruptcy, and you may be able to recover. However, whatever additional debts may be added to your credit report during that 10-year period will also be factors on your score. For example, a car payment paid on time after a Chapter 7 may improve your score more quickly than 10 years, but new delinquent debts may further harm your score and diminish the benefit of having the bankruptcy removed from your credit.
- If you opt for Chapter 13 or Chapter 12 bankruptcy, this will stay on your credit reports for seven years from your filing date.
It’s important to consider which bankruptcy chapter is a good fit for you when you’re looking to file.
Which Type of Bankruptcy Should I Choose?
Which form of bankruptcy is right for you? It mostly comes down to a case-by-case basis, and our lawyers can help you determine the right course of action. With that said, there are some primary differences in the way that you file. Here are how the different types of bankruptcy differ:
- Chapter 13 Bankruptcy is for people who have a steady income and want to pay off their debt in manageable chunks over time
- Chapter 7 Bankruptcy is for people who can’t currently pay off their debt but may be willing to liquidate some of their assets, although liquidation does not often occur.
- Chapter 11 Bankruptcy is for businesses and consumer debtors with lots of assets to consider. There are special provisions for individuals or corporations that qualify as small business debtors, which can make the Chapter 11 process quicker and easier.
- Chapter 12 Bankruptcy is a unique type of bankruptcy for family farmers and fishermen.
How to Repair Your Credit After Filing for Bankruptcy
While bankruptcy can have a large impact on your credit score, there are steps you can take to rebuild your credit—even while bankruptcy is still on your credit report!
- Use a secured credit card. This is a credit card that you pay a fee for that will serve as your credit limit. By paying off debts with this card regularly, you can start rebuilding your credit.
- Keep your overall credit usage low each month at about 20% of your credit limit.
- Keep credit open for as long as possible.
Schedule a Free Consultation with Our Statesboro Bankruptcy Attorneys
While bankruptcy can affect your credit score for some time, it’s a chance for you to get a fresh start. The first step to that fresh start is finding proper representation.
At H. Lehman Franklin, P.C., our lawyers H. Lehman Franklin, Jr. and Kim Ward, decode the law for you, so you can get the debt relief you deserve.
If you’re a Georgia resident seeking to file bankruptcy, let us see your case by scheduling a free consultation today!