The Impact of a Bankruptcy Filing on Your Credit Score

You have worked really hard to build and maintain a solid credit record, but have faced significant financial challenges in the last year or so. Maybe you had an illness or injury that kept you from working. Maybe you went through a divorce, or lost your job. The stress of dealing with the continual calls and letters has led you to consider bankruptcy as a way to get a fresh start, but you worry about the potential effect it will have on your credit record. Will your opportunity to obtain credit be ruined forever?

The simple answer is NO! While your bankruptcy case is open, you cannot obtain credit without approval of the bankruptcy court. Most lenders do not lend to people with an active bankruptcy case.

However, the good news is that potential lenders are more interested in what you have done lately than the fact that you have ever filed for bankruptcy protection. Our clients are consistently shocked that they begin receiving credit card offers in the mail as soon as six weeks after their bankruptcy cases are closed. if you consistently make all your payments in a timely manner, you will start to rebuild your credit. Filing for bankruptcy can actually improve your ability to get a loan in the future. By wiping out the debts that you currently owe, you will improve your debt to income ratio, which is an important factor in determining credit worthiness.

Contact John Hargrave and Associates

We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-547-6500.