How Filing for NJ Bankruptcy Affects Your Credit Score

NJ bankruptcy

One of the biggest fears people have when it comes to filing for bankruptcy is how it will impact their credit score. The fear of losing good or even mediocre credit sometimes causes those struggling with debt to avoid filing for bankruptcy long after they should. While bankruptcy will negatively impact your credit score and can stay on your credit report for up to ten years, it is still sometimes the best option for those struggling to manage their debt. There are many benefits to filing for bankruptcy sooner rather than later when it comes to your credit score and overall financial health. The experienced legal team at Veitengruber Law provides personalized bankruptcy and credit repair counseling based on years of insider knowledge of how the credit industry works.

Depending on which kind of bankruptcy you file, your credit score will decrease on average between 160 and 220 points. This is enough to take a good credit rating down to a fair or poor rating. The consequences of having a low credit score are numerous. Credit card and loan applications may be denied or higher interest rates may be applied and you may face difficulty purchasing a car, getting approved for an apartment, or getting a cell phone contract. Our skilled team will help you understand how your specific bankruptcy case will affect your credit score before you file.

Under Chapter 13, the bankruptcy will appear on your credit report for up to seven years and any discharged debts will stay on your report for up to seven years after they have been discharged. Because many debts stay active during the payment plan timeline designated under a Chapter 13 bankruptcy, it is possible for discharged debts to appear on a credit report longer than the bankruptcy itself. Under Chapter 7, the bankruptcy will appear on your credit report for up to ten years. Because all debts included in a Chapter 7 bankruptcy will be discharged within a few months of filing, the discharged debts should fall off the credit report before the bankruptcy.

It is important to remember that as the items associated with a bankruptcy age, they will appear less and less on a credit report and therefore have less and less of a negative impact on your credit score. This is a big reason to consider bankruptcy instead of allowing debt to grow and go to collections. Instead of continuing the struggle to keep up with your debts, bankruptcy is a chance for you to start rebuilding and repairing. The sooner you begin the process of bankruptcy, the sooner you can start the process of improving your credit score and becoming a stronger financial consumer.

Rebuilding your credit score after filing for bankruptcy takes time and patience, but the Veitengruber Law team is here to help you every step of the way. We offer counseling on the steps you need to take to improve your credit after bankruptcy. Our holistic approach to debt relief means our job does not end once we have settled your bankruptcy case. We are there for you after bankruptcy, providing expert advice on how to repair and rebuild your credit. It is our goal to create a forward-looking plan to improve your credit based on our real-world experience and expert knowledge of the consumer’s rights in the credit industry. We provide our clients with the tools they need for a brighter financial future.

While we will always analyze other debt relief alternatives, your specific circumstances may make bankruptcy the best option. The main thing to remember is that avoiding filing for bankruptcy in order to hold on to your credit score—and allowing your debts to linger and go to collections in the process—will also very negatively impact your credit score. When it comes to debt management, being proactive and filing for bankruptcy should not be considered the end of the road. On the contrary, it is absolutely possible to achieve an excellent credit status after bankruptcy. We are here to help you turn a bankruptcy into an opportunity to establish a healthier financial future.

Filing for bankruptcy can be a confusing, intimidating, and emotional decision—but you do not have to go through it alone. Working with Veitengruber Law means working with experienced attorneys and legal professionals who have a solid understanding of bankruptcy law and credit repair solutions. We approach every bankruptcy case on an individual basis and there are many ways we can help mitigate the impact bankruptcy has on your credit score. Contact us today to find out if bankruptcy is the right path to your brighter financial future.

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