How Long Does Bankruptcy Stay on My Credit Report?
While bankruptcy is a suitable option for many Pennsylvania residents, it can also lead to credit score concerns. Your credit score is an important aspect of your financial life, and a notable decline could make it challenging to obtain loans, purchase a house, and much more. So, how long do you have to wait before you get a “clean slate”? This might be something worth discussing with a bankruptcy lawyer in Hershey, PA.
It Depends on Which Type of Bankruptcy You Choose
To answer this question, you will first need to consider which type of bankruptcy you have chosen. According to the US Bankruptcy Code, a Chapter 7 bankruptcy remains on your credit report for a full decade. During a Chapter 7 bankruptcy, you must liquidate all of your nonexempt assets – leading to a relatively quick resolution.
On the other hand, a Chapter 13 bankruptcy stays on your credit report for “only” seven years. With this approach, you will keep your property while adhering to a debt repayment plan approved by the bankruptcy court. This represents a longer, more drawn-out process with the benefits of keeping assets during the repayment plan.
You Can Still Buy a House or a Car While Waiting for the Bankruptcy to Disappear From Your Credit Report
While waiting for many years might seem daunting, you do not necessarily need to put your plans on hold just because your credit report is not perfect. One of the most common misconceptions is that it is impossible to purchase a house with a bankruptcy on your credit report. While it might be more challenging to achieve this goal, it is still possible.
The only requirement is that you are discharged from the bankruptcy process before applying for a mortgage. With a Chapter 7 bankruptcy, discharge occurs just a few months after filing. You can apply for a mortgage after this, and you can improve your chances with various steps. Perhaps most obviously, you might want to choose a more affordable home, as banks will probably feel more comfortable loaning you a smaller amount. You might also want to team up with a partner or spouse to improve your chances.
You Can Take Steps to Rebuild Your Credit Score After a Bankruptcy
Immediately after your bankruptcy, you can take steps to rebuild your credit. Continue to make prompt payments on any other debts you might have, including student loans and credit cards. You might also consider obtaining a new credit card and using it regularly, while making prompt payments.
Contact Audi Law for More Information About Bankruptcy in Pennsylvania
It is only natural to have concerns about bankruptcy. The good news is that you do not need to search for answers alone. While online research might be a positive start, you can get all the answers you need directly from a bankruptcy lawyer in Hershey, PA. A consultation could represent an opportunity to ask questions about credit scores, exempt assets, and much more. Contact Audi Law at 717-707-5611 or visit us online to continue this conversation.