Will Chapter 7 hurt or help my credit score?
Filing Chapter 7 Bankruptcy in Indiana usually helps rebuild your credit. The reason for this is because most people who need to file Chapter 7 Bankruptcy already have damaged credit from defaulted debts or because they are too heavily laden with debt. Filing Chapter 7 gives Indiana residents the ability to get a “fresh start” or a “clean slate.” Essentially, all information – good or bad – on your credit report is “wiped clean.”
This can mean a considerable increase in credit potential almost immediately after your Indianapolis Chapter 7 bankruptcy attorney files your case. You will likely receive small unsecured and car loan credit offers almost immediately after filing Chapter 7. Larger loans such as mortgages or higher balance credit cards may take 2 years or more of credit rebuilding.
Therefore, in most cases, our clients’ credit rating increases after filing bankruptcy. However, a minority of our clients’ credit ratings – who may have had a “A” or “B” credit rating before filing Chapter 7 – will likely experience decrease in credit rating, of course, after your Indianapolis Chapter 7 bankruptcy attorney files your case. We have always liked to say – for purposes of illustration only – that you kind of have a “C” or “C+” credit rating after filing bankruptcy that can be rebuilt (because you do not have negative hits anymore) with good credit practices. This is much better than the “D” or “F” credit that many of our client have when they come into our office!
“We have found that bankruptcy can be a very powerful tool for restoring credit. We have many clients that file primarily to rebuild their destroyed credit situation. Do not let the unfounded fear of destroying your credit keep you from getting the debt relief that you need.” – Attorney John Forest Bymaster