How Much Does A Bankruptcy Affect My Credit Score?

27 November of 2014

Filing for bankruptcy can be one of the most important and devastating decisions of a person’s financial life. Meant to be a final option to find relief from an overburden of debt, bankruptcy can affect more than just the status of your debt.

Among the things affected by filing bankruptcy, the most vital can be an individual’s credit score. Also, it is important to remember that you are not alone. Many people that have filed for bankruptcy are able to recover and get back on there feet. How much does filing bankruptcy actually affect your credit score? The answer depends on several other crediting factors.

Type of Bankruptcy

How seriously bankruptcy will affect your credit score depends on the type you have filed for. Filing for Chapter 7 versus Chapter 13 will have different stipulations on debt forgiveness and a different drop of your credit score. On average, filing for either of these types of bankruptcy, your credit score can be expected to fall from 160 to 220 points. This means that were you in good standing before your bankruptcy, it is likely you’ll still have fair credit. If your credit was only fair, you may now be facing a poor rating, making it more difficult to secure bank loans, credit cards, or auto financing.

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Credit Report

Your credit report is a compiled list of each financing, loan, and outstanding debt you may incur as an individual or a business. Different types of bankruptcy may appear on your credit report for different amounts of time. Chapter 7 bankruptcy can stay on that report for up to ten years, while Chapter 13 bankruptcy only remains for up to seven. As the bankruptcy gets older, and more time has passed between the filing and the current date, the less impact it has on your credit score (Source:

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Seeking the expertise of a professional is the best way to ensure you understand what to expect after filing for bankruptcy. Consider how bankruptcy will affect your credit score before making such an important financial decision. Check your credit report and FICO score yearly in order to determine your current standing and how filing bankruptcy may impact this score.


What most people do not realize is that your credit score can improve after you file for bankruptcy. It allows you to rebuild credit because it can eliminate old debt and credit reports. Remember, that after filing for bankruptcy many people are now able to rebuild their credit, improve their credit score, buy/lease a car, buy/rent a home, improve their lifestyle and become debt free.

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Now that you are debt free, it is important that you stay debt free. In order for you to stay debt free, you must be able to control your spending. Also, it is important to live within a budget and start a savings plan for your future. The next step would be to apply for a credit card and start to rebuild your credit from the ground up.


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