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Can my credit recover after bankruptcy?

The word bankruptcy tends to bring an unnecessarily negative connotation. In reality, filing for bankruptcy can be a positive solution to a difficult financial situation for almost anyone to consider. For those thinking about bankruptcy and worrying they’ll forever sacrifice their credit score, there’s some good news you should know.

Filing Chapter 7 or Chapter 13 bankruptcy will by no means spell the end of your healthy credit report. In fact, there are a number of positive financial options for those in North Carolina looking to rebuild credit after a bankruptcy filing.

The reality for many people considering filing bankruptcy is that their credit score is already in a tenuous position due to the amount of debt incurred and any potential missed payments. These factors contribute to the decision to file for bankruptcy as well as a decreased credit score.

Working to rebuild credit

Though it takes time, rebuilding credit after a bankruptcy filing can resolve these past burdens on your score as well as the impact of the bankruptcy filing itself. Your financial life continues after bankruptcy, so it may be helpful to focus on what comes next as opposed to the dip in a score during the bankruptcy process.

It’s normal to see a drop in your credit score after an initial bankruptcy filing. Each person, score and situation differs, but typically higher beginning scores may see a bigger drop at first. Lower existing scores tend to see smaller drops, but had already decreased due to past credit actions as well.

How long does it take?

A Chapter 7 bankruptcy stays on a credit report for 10 years after filing and Chapter 13 remains for seven years. During this time, it’s still possible to take out new lines of credit and begin the process of recuperating a credit score. Secured credit cards and other credit-rebuilding loans are commonly-used tools for those working to rebuild credit after a bankruptcy filing.

Although bankruptcy information stays on a credit report, it will not affect a score indefinitely. Moving on after bankruptcy involves wise financial decisions and the advice of skilled bankruptcy professionals, though it’s far from impossible to recover. Eliminating past debts and working toward a healthier financial future is an option worth considering for those dealing with overwhelming debt and an already tenuous credit report.

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Sigmon & Henderson, PLLC
518 S New Hope Road
Gastonia, NC 28054

Phone: 704-269-6374
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