FAQs: Bankruptcy & Your Credit Report

March 31, 2022 Bankruptcy

What sort of impact does filing for bankruptcy have on my credit report?

Filing for bankruptcy will have a negative effect on your credit score. However, if you are considering filing for bankruptcy, you are likely already having trouble paying your bills and late payments, repossessions, collections, and foreclosure actions all negatively affect your credit. Therefore, in reality, filing for bankruptcy could just be the first step in rebuilding your credit. 

How long will filing for bankruptcy affect my credit report?

Credit reporting agencies are regulated by Section 605 of the Fair Credit Reporting Act. The Act states that a bankruptcy may not be reported on your credit report after ten years have passed since the date the bankruptcy case was filed. 

Does the type of bankruptcy I file make a difference on my credit report?

Yes, the type of bankruptcy you file can make a difference in your credit report. Chapter 7 and Chapter 13 are the most common types of bankruptcies filed by individuals. While both can stay on your credit report for up to ten years, Chapter 13 filings typically only remain on your credit report for seven years. This is because a Chapter 13 filing will involve a repayment plan, and some debt will be paid off prior to a bankruptcy discharge being entered. 

Will I ever be able to buy a car or a house if I file for bankruptcy?

Filing for bankruptcy does not mean you will never be able to have credit extended to you by finance companies ever again. It may take some time, but it is typical for credit card companies to offer you credit around 12 months after a bankruptcy discharge. Approximately 24 months after a discharge in Chapter 7, or 24 months into a Chapter 13 bankruptcy plan, mortgage lenders and car finance companies are likely to consider extending your credit so you can buy a house or a car. 

Is there anything I can do to improve my credit report after filing for bankruptcy?

Yes, you can do things to improve your credit report after filing for bankruptcy. Some of them are pretty simple, such as:

  • Keep Payments Current: Not missing a payment can help improve your credit score while missing or being late on a payment can cause your credit score to decrease even further.
  • Obtain a Credit Card: Another way to rebuild your credit is to apply for a secured credit card. This type of credit card requires you to place a security deposit which then determines your credit limit. Repaying the credit card balance can help improve your credit score.

Who should I speak with if I am considering filing for bankruptcy in Florida?

If you live in Florida and are thinking of filing for bankruptcy, contact the professionals at Martin Law Firm, P.L. We can meet with you and help you understand your options. If bankruptcy is the right course for you, we will assist you throughout the entire process. You may reach us via our contact page.