The decision to declare bankruptcy is no doubt a difficult one. The concern for most people is what consequences bankruptcy will have on their credit score. To avoid any surprises that may arise as a result of declaring bankruptcy, Illinois residents must understand the affects bankruptcy may have on their future credit. Joliet, Plainfield, and all other Will County residents, considering bankruptcy, should first take into account its possible effects.
Filing for bankruptcy can cause your credit score to drop and may prevent you from obtaining credit after filing. If a lender is willing to accept your credit application with a lower credit score, the terms of the acceptance are likely to be less favorable than that of someone with better credit. It is important to keep in mind that the type of bankruptcy you choose to file will determine how long the bankruptcy will remain on your credit report. Chapter 7 bankruptcy will remain on your credit report for ten years after you file, whereas Chapter 13 bankruptcy will remain on your credit report for seven years after the bankruptcy is completed.
A bankruptcy on your credit report signals a red flag to creditors. However, the amount of damage that will be done to your credit score will depend on your credit score before your bankruptcy is filed. After the case is filed, you can begin rebuilding your credit score back up.
Bankruptcy can certainly have a detrimental effect on your credit. However, failure to file may result in your debts reaching the credit card company’s collections department, which will also negatively impact your credit score. It is also worth keeping in mind that as soon as your bankruptcy is completed, and you get your finances in order, you can rebuild your credit score. In other words, the devastating effect of bankruptcy can be repaired by maintaining a positive payment history after you get through the bankruptcy process.
If you are a Joliet, Plainfield, or other surrounding Will and Grudy County resident considering filing for bankruptcy, and are wondering whether doing so will affect your future credit, contact an experienced bankruptcy attorney at Hamilton & Antonsen, Ltd. For more information and a complimentary consultation, call 815.729.9220.