Will Filing for Bankruptcy Affect Credit Score?

Most people filing bankruptcy already have a below average credit score. When the bankruptcy is filed, your credit score may dip down further; however, a chapter 7 bankruptcy can clear and wipe out all defaulted debt within 90 days, which will start the rebuilding process. In most cases, a person filing ch 7 bankruptcy can reach an "average" or even above average credit score 6 - 12 months after filing bankruptcy. 90 days after filing a ch 7 bankruptcy, one can get a new credit card. Using new credit cards (and paying them) will quickly rebuild credit scores. A good time to get new car loan is at least 1 year after bankruptcy, and for a home loan, at least 2 years after the bankruptcy. Always consider how long it will take you to pay off or even settle the unsecured debt. If it will take 3 or more years to pay off debt and will prevent savings and ability to pay necessities, you should consult an attorney about qualifying for a ch 7 bankruptcy.

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