Does Bankruptcy Affect my Credit?

Yes. But how much depends on the individual filer. I have seen some filers score increase slightly and some scores drop dramatically. The reality is your score has already been affected by late payments and charge offs. Individuals with low scores generally do not see much of a drop in their score when they file.

A Chapter 7 filing bankruptcy stays on your credit for 10 years. A Chapter 13 bankruptcy will stay on your credit for 7 years.

Credit cards Many bankruptcy filers are bombarded with credit card offers after the bankruptcy is over. Credit card companies know you can’t file again for another several years (which means you can’t discharge any credit card debt you run up during that time), so they might be eager for your business. But beware—the credit card offers will likely have high interest rates, annual fees, and other high charges.

Auto Loans. Most likely you won’t have a problem getting an auto loan right away, but the interest rate will probably be higher. There are providers that focus on providing loans for individuals who have filed bankruptcy.

Mortgages. This may take the longest but varies depending on your available down payment, income, and amount of debt. After a Chapter 7 bankruptcy it may take at least 4 years or more before being able to qualify for a mortgage and 2 years or more for a Chapter 13. It depends a great deal on the efforts that you take to rebuild your credit.

Credit Building. You can rebuild your credit after filing for bankruptcy. Credit scoring companies look at several factors when computing your score: payment history, length of your credit history, current debt, and how much new credit you have been applying for. It is important to start early if you want to improve you credit after bankruptcy.