HOW LONG DOES BANKRUPTCY APPEAR ON A CREDIT REPORT?
The coronavirus pandemic has impacted the physical, emotional, and financial health of countless individuals across the country. Many were laid off while others were furloughed or forced to take salary reductions. It’s been a challenging time that has put many people in difficult financial situations.
In 2020, there were 6,293 filings for bankruptcy in the Southern California district, according to the US Bankruptcy Court, Southern District of California. Filing for bankruptcy is like turning a new page in your financial life. While it has its drawbacks, filing for bankruptcy can help you achieve the debt relief you need. The Orantes Law Firm helps clients in Los Angeles County and Orange County through this complex legal process.
CHAPTER 7 BANKRUPTCY
Chapter 7 bankruptcy is a process during which, if you are eligible, you can discharge some of your debts and find relief from creditors. However, you may lose some of your assets. The majority of people with significant debt problems are eligible to file for Chapter 7 bankruptcy.
Chapter 7 will help you immediately stop creditor harassment in almost all cases, and it’s the simplest and quickest form of bankruptcy. No bankruptcy process is easy, however. While you’re not required to hire an attorney, legal guidance can be extremely helpful during this process.
HOW LONG DOES CHAPTER 7 BANKRUPTCY REMAIN ON YOUR CREDIT REPORT?
Chapter 7 bankruptcy will stay on your credit report for up to 10 years after the date of filing, however, you may be able to see your credit score improve within 18 months of filing.
CHAPTER 13 BANKRUPTCY
Chapter 13 bankruptcy is different from Chapter 7 in that it’s more of a debt-restructuring plan than a debt-discharging plan. This essentially means that the consequences are less severe and less long-lasting.
If you have a job with a steady income, then you may want to consider filing for Chapter 13 bankruptcy. You have to meet a number of requirements in order to qualify, including having unsecured debt that’s less than $394,725 and secured debt that does not exceed $1,184,200.
With Chapter 13 bankruptcy, remember that you will still be repaying your current debts — but under different terms than what you were previously.
HOW LONG DOES CHAPTER 13 BANKRUPTCY REMAIN ON YOUR CREDIT REPORT?
Chapter 13 bankruptcy can stay on your credit report for up to 7 years from the date of filing. It does look better on a credit report than a Chapter 7 bankruptcy because most or all of the debt will be repaid.
HOW MUCH DOES BANKRUPTCY AFFECT MY CREDIT SCORE?
You may be worried about your credit score and how much a bankruptcy will affect it. While your credit score may dip soon after your bankruptcy, you can begin to recover quickly and may even see improvements within the first 18 months. Once the bankruptcy is removed from your credit reports, your score can continue to improve.
WHAT CAN I DO TO
IMPROVE MY SCORE?
There are several actions you can take to work on improving your credit score right away. First, you can start rebuilding your credit by paying your bills on time and possibly even signing up for a secured credit card. You should also check to make sure that only applicable accounts were reported.
Once the time frame (ten years for a Chapter 7 bankruptcy and seven years for a Chapter 13 bankruptcy) has expired, you can follow up to make sure the bankruptcy has been removed from your credit report history.
THE ORANTES LAW FIRM: EXPERIENCE YOU CAN TRUST
If you are considering filing for bankruptcy in Los Angeles County or Orange County, you should speak with our team at The Orantes Law Firm. The pandemic has created financial difficulties for many people, and those struggles can continue to get worse without help. Filing for bankruptcy may offer you the financial clean slate you need to start fresh.
If you live in Los Angeles, Irvine, Orange County, or Los Angeles County, contact The Orantes Law Firm today for a free consultation. Together, we can discuss your financial situation and determine whether or not filing for bankruptcy is the right decision for your finances.