How Long Will Bankruptcy Stay on My Credit Report in Pennsylvania?
Having a large amount of debt can negatively impact your FICO score, making it difficult to be approved for a mortgage, car loan, or open a line of credit. While filing for bankruptcy can help you start fresh or pay off your debts in a manageable time frame, it will show up on your credit report for quite some time. While getting out of debt is something worth celebrating, anything that requires you to hold off on buying your dream home or pursuing a new degree can be utterly discouraging.
Whether you are considering bankruptcy or have recently filed a Chapter 7 or Chapter 13 bankruptcy petition, our Hershey, PA, debt relief attorney is ready to assist you. In this blog, we discuss the impact that bankruptcy can have on your credit report.
Eligibility for Chapter 7 or Chapter 13 Bankruptcy
Eligibility for Chapter 7 bankruptcy is based on income, requiring that your average income over the past six months be lower than the state’s median income. If you are current on your car payments and mortgage, then you will likely be able to keep your vehicle and house throughout the process.
Under Chapter 13, the current debt threshold is $2.75 million. This includes both secured and unsecured debt. Secured debt includes debt that is backed by collateral (such as a mortgage), while unsecured debt is not backed by collateral (i.e., credit card debt). Unlike Chapter 7, there are no income limits for a Chapter 13 filing.
Bankruptcy Filings on Credit Reports
Lenders and creditors rely heavily on your credit report to determine your interest rate and other terms. Be aware that a Chapter 7 filing will remain on your credit report for 10 years, whereas Chapter 13 will fall off your report after seven years. During this time, it is unlikely that you will be able to open a line of credit, a new credit card, or secure any type of loan.
Guidance from Compassionate Counsel
Bankruptcy court does not report a bankruptcy filing to any of the major credit bureaus. That being said, your bankruptcy filing can show up to ten years later on your credit report. Unfortunately, you cannot legally remove information from your report; you can only ask a credit bureau to investigate information that is incomplete or inaccurate. While seeing a drop in your score may be cause for concern, most negative credit information is removed from your report after eight years.
At Audi Law, PLLC, we know the anxiety that comes with dealing with debt, filing for bankruptcy, and, subsequently, a damaged credit score. Although both Chapter 7 and Chapter 13 bankruptcy negatively affect your credit, sometimes lenders are more inclined to look favorably upon a Chapter 13 filing. When you meet with our debt relief attorney, we will assess your financial situation to decide what solution is most likely to meet your needs. In some cases, alternative debt relief options may provide you the best chance of moving forward financially.
Debt Out of Control? Speak with Our Hershey, PA, Debt Relief Attorney Today
Whether it be consumer debt, student loan debt, or tax debt, our choices can impede our ability to progress. If you or a loved one are looking to find a practical solution for your debt, our Hershey, PA, debt relief lawyer is here to help. With years of serving Hershey, Pennsylvania, and the surrounding communities, Audi Law, PLLC, has helped hundreds of people clear debt and start anew. If you are ready to get started, contact the office online or by phone to schedule your consultation.