This question addresses two different concepts: how your bankruptcy will affect your credit and how long it will be reflected on your report. A bankruptcy filing could show up on your credit for up to ten years but the effect it has on your score may be more positive than you think
Let’s address the first question: Will the effect that bankruptcy has on your score be strictly negative? When debt overwhelms you to the point of needing to file bankruptcy, your credit usually isn’t in good shape anyway. At that point, there isn’t much credit for bankruptcy to ruin. Believe it or not, a bankruptcy filing can do some positive things for your score.
– It wipes the slate clean. The debt that you were carrying was not only weighing down you and your family, but also your credit score. After your discharge, the debts that were weighing down your score are zeroed out.
– It allows you to start rebuilding your credit. Debt is like a speeding train. It is nearly impossible to stop and what’s left behind is damaged. Once you no longer live in fear of the threats of your creditors, you can start making the responsible decisions you wanted to make–like making payments on time.
Most of my clients have found that their credit score actually improves after a bankruptcy.
Now, the second question: How long will bankruptcy stay on my credit report? As previously mentioned, a bankruptcy filing can remain on your report for up to ten years legally. But are you really sure that an old bankruptcy filing on your history means something substantial? It certainly can’t stop you from making good choices like reviewing your credit history and making sure everything is accurate.
In my experience as a St. Louis bankruptcy attorney, if someone who filed bankruptcy has not rebuilt there credit in 2 to 3 years than it probably doesn’t have anything to do with the fact that he or she filed bankruptcy. Plus, rebuilding a damaged score without the help of a bankruptcy attorney could be much more difficult.
With all the myths floating around, it is somewhat refreshing to be able to tell people the truth about Missouri and Illinois bankruptcy. The fact of the matter is that, if you are in debt, you have to make tough decisions—but the tough choices you make are intended to free yourself of the prison that debt puts you in.
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