How Does Bankruptcy Affect My Credit?


Many individuals fear that filing a bankruptcy will hurt their credit score and prevent them from getting further credit. While there are many factors involved in a company’s decision to provide financial products to an individual that has filed bankruptcy, it is important to remember that persistence will pay off in the long run and knowing your options is key.

It is important to understand the time frame that is involved when filing either a Chapter 7 or a Chapter 13 bankruptcy and how that will affect your ability to repair your credit. Typically, it takes anywhere from one to three years to repair your credit after a bankruptcy has been filed.

One common misconception is that filing a Chapter 13 bankruptcy will affect your credit less than a Chapter 7 because you are paying off your creditors. In a Chapter 13 bankruptcy, you use your income to pay some or all of what you owe to your creditors over time, from three to five years, depending on the size of your debts and income.  A Chapter 13 bankruptcy affects your credit score the same way that a Chapter 7 does, only the time frame for credit repair is greater because you are in the bankruptcy process for three to five years while you are paying off debt to your creditors.

A Chapter 7 bankruptcy, on the other hand, discharges many of your debts and can be filed within a few months. Therefore, the process is much shorter, and the time it takes to repair your credit is less.

It is important to understand your options and how bankruptcy will affect your credit. Knowing your options is crucial to alleviate your fears and misconceptions about the bankruptcy process. Please contact one of our professional bankruptcy attorneys at Hoglund Law Office to discuss your specific situation and find out whether a Chapter 7 or Chapter 13 bankruptcy is right for you.

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

View all author posts →

Legal Blog Expert