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We practice CONSUMER BANKRUPTCY
law exclusively. 407-982-3763

We practice CONSUMER BANKRUPTCY law exclusively. 

One of the top Bankruptcy Filers

in the Orlando Area

One of the top Bankruptcy Filers

in the Orlando Area

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  4.  » Financial recovery after a Chapter 7 or Chapter 13 bankruptcy

Florida residents often wonder what the impact of a bankruptcy will be on their credit. A Chapter 7 or Chapter 13 bankruptcy will make an impact on your credit, but not all of the results are bad. There are things that you can do in order to hasten the rebuilding of your credit.

Once the bankruptcy process is complete, you will no longer be responsible for certain debts. This means that your debt-to-income ratio (which is the amount of your debt in relation to the amount of your income as the name implies) will be lower. Creditors will consider this ratio before extending credit to you.

In addition, when the bankruptcy is closed and a discharge is issued, it sets a benchmark for the debts disposed of on your credit report. It no longer matters if the account was delinquent or charged-off since your income is no longer affected by those debts. Furthermore, lawsuits, repossessions and foreclosures no longer have the same impact as they did before the bankruptcy.

A bankruptcy does stay on your credit for 10 years, but that is only three years more than late payments, which also significantly affect your credit. Often, a bankruptcy can stop the downward spiral of your credit score. Regardless of what type of financial issues you encountered, your credit score began taking hits as soon as you were no longer able to make payments. Without filing for bankruptcy, your score would have continued to drop as you continued to struggle financially.

In any case, it is possible to recover financially after a Chapter 7 or Chapter 13 bankruptcy. Rebuilding credit can be done in any number of ways, and your Florida bankruptcy attorney should be able to advise you on the best way to do so based on your individual circumstances. The more advantage you take of your clean slate, the better off you could be financially in the future.