Will Filing Bankruptcy Affect My Credit? – San Diego Bankruptcy Lawyer

One of the most common questions that bankruptcy clients typically ask is whether filing bankruptcy will affect their credit.

When answering that question, it is important to note that every person has an individualized and different credit score. As a result, not every person that files bankruptcy will see the same effects to his or her credit rating. 

That being said, a bankruptcy filing will show up on one’s credit report. Typically, if one files Chapter 7 bankruptcy, it may stay on for up to 10 years. If one files Chapter 13, it may stay on for up to 7 years.

Individuals with relatively high credit scores will typically see a drop in their credit scores upon the filing of bankruptcy. However, oftentimes, individuals who are filing bankruptcy have low credit scores prior to filing due to unpaid debts, late payments, high balances, and collection accounts. These clients may actually see their credit scores increase upon the filing of a bankruptcy petition. The reason is that debts on these individuals’ credit reports are “wiped clean” in bankruptcy, meaning that they are included as being part of a bankruptcy proceeding.

Furthermore, even after filing, many bankruptcy filers are able to obtain new credit cards immediately, albeit sometimes at higher interest rates. In addition, filers are often able to obtain vehicle loans and home mortgages within a year or two after filing.

For more information in connection with your bankruptcy, please contact the VC Law Group at info@thevclawgroup.com or 858.519.7333.