How does bankruptcy affect my credit?

A Chapter 7 Bankruptcy will remain on your credit report for up to 10 years.  However, you can immediately begin re-establishing your credit after your case is filed.  Due to the fact that you are wiping out your debts and cannot file again for 4 to 8 years, credit companies want to be first in line to extend credit to you again.  By not filing Bankruptcy, your credit report may show negative information for 7 years from the time you become current.  By filing a Chapter 7 bankruptcy, negative reporting stops immediately.  This allows you to begin re-establishing credit faster by keeping house, auto or other payments current. One of the best ways to rebuild your credit is by making payments on Student loans.

If you have filed a Chapter 7 bankruptcy, you should check your credit report after your case is discharged to insure that everything has been corrected on the credit report. After that you should check your credit report once a year to make sure that you are getting positive reporting. Normally you should have your credit score over 620 (acceptable credit) within one year after your discharge and you may be able to get your score over 700 within two years after your bankruptcy.

Edrie Pfeiffer
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Edrie Pfeiffer, Bankruptcy & Divorce Attorney