One of the most common reasons why people file bankruptcy is financial hardships resulting from unexpected events, such as a job loss and medical issues. However, regardless of how often a job loss can occur or how quickly expensive medical bills can add up, it is a big decision to file for bankruptcy – and one that will significantly impact your credit history. As such, filing for bankruptcy is generally a last resort for most people to save their finances when they have exhausted all other options.
Bankruptcies Do Not Look Good on Your Credit
We all know that a bankruptcy filing will always be considered a negative point on your credit report and will no doubt impact your credit score. The general takeaway is that as long as a bankruptcy filing is listed on your credit, your credit score will be impacted for years to come.
Bankruptcies, and as a result a lower credit score, can also damage your ability in other ways, such as prohibiting you from taking on additional credit, getting a loan, or even qualifying for housing. The real question, however, is how long can you expect a bankruptcy filing to stay on your credit reports and impact your credit score.
How Long Will a Bankruptcy Filing Stay on My Credit Report?
The amount of time that a bankruptcy filing stays on your credit report depends on what type of bankruptcy you filed. The main type of bankruptcy most people file for personal reasons is Chapter 7.
Chapter 7 bankruptcy, also known as liquidation bankruptcy, is generally referred to as a “straight bankruptcy” by creditors. This type of bankruptcy is the most common type filed by consumers and is typically completed within three to six months. Once you file for Chapter 7, you will no longer have to pay back any unsecured debt, such as personal loans, credit cards and medical expenses. However, you may have to liquidate or sell some of your assets to pay off secured loans.
Chapter 7 bankruptcy will stay on your credit report for 10 years from the date you file. Although there is no exact science behind how much your credit score will be impacted after filing for bankruptcy, there are some estimates you can rely on. For example, if your credit score is 780 or higher, you would be dinged between 200 and 240 points. On the other hand, if you started with a lower score of 680, you would lose 130 to 150 points. An experienced Central Valley bankruptcy attorney would be able to provide you with more guidance.
Call an Experienced Central Valley Bankruptcy Attorney
If you are considering Chapter 7 bankruptcy, it is in your best interest to consult with an experienced bankruptcy attorney to help you learn your legal rights and options, especially with respect to Chapter 7 bankruptcy.
For more information or to schedule a complimentary consultation with Central Valley bankruptcy attorney Gurjit Srai, please call 209-323-5558, or complete our online form.