23 Apr How Long Does Bankruptcy Negatively Affect My Credit?
If you have recently found yourself in a situation where you need to file bankruptcy, you might be wondering what the laws are in regard to how long it bankruptcy will be on your credit rating. It is sometimes difficult to make this choice because you know that it will affect your credit, but the alternative is to continually deal with bill collectors that are literally ruining your life. To resolve the situation, filing either chapter 7 or chapter 13 bankruptcy are options that you have available to you, whether you are an individual or a person that is running a business. There are many positive reasons for doing this, despite the effect on your credit, and this article will address all of that plus how long it will be on your credit rating if you are in Kansas City.
Options When Filing Bankruptcy
You have a couple of options when it comes to filing bankruptcy. The first option is filing chapter 7. This is a very common type of Kansas City bankruptcy which will discharge all of your legal obligations that would obligate you to pay off all of the unsecured debts that you have amassed over the last few years. Chapter 13 bankruptcy focuses on those that have secured debts, and will restructure this debt so that you can pay it back over time. This is the best choice for people that would prefer keeping many of the things that they own, and will prevent creditors from repossessing any of it once the bankruptcy has gone through.
Why Should You Consider Doing This?
The main reason that people will talk to Kansas City bankruptcy attorneys is that you are simply not able to recover from all of the debt that you are under. If your goal is to eliminate as much of it as possible, then filing Chapter 7 would be the best choice for you. If you have assets that are secured that you would like to retain, Chapter 13 would be the best option. It is the option that people will choose if they are able to make minimum payments to get everything paid off over a specific period of time, and these are going to stay on your credit score for a much shorter duration.
How Long Does It Bankruptcy Remain On Your Credit Rating?
Most bankruptcies will last as long as 10 years, although they can be eliminated after seven years in some cases. If you do file Chapter 13, these are typically eliminated after seven years, another reason that people often choose this particular option. Once it is gone, you will actually know that it has been removed as you will start to receive credit card offers and loan offers in the mail. These companies are constantly checking to see when certain individuals have had the bankruptcy removed, and will try to contact them about taking out loans after the bankruptcy is no longer there.
The best thing that you can do during this time is to establish your credit as best as you can. There are still credit card companies that will send you offers for a credit card and you should make regular payments for multiple years until your bankruptcy has been eliminated from your credit score. At that point, your credit rating will be lifted to a much higher level, allowing you to qualify for car loans, mortgages, and many other lines of credit. If you have come to the conclusion that you will not be able to pay off all of the creditors that you owe, you should talk to one of the many Kansas City bankruptcy attorneys to find out how they can help you.