A Chapter 7 bankruptcy is a viable option when you’re overwhelmed with financial difficulties. It releases you from personal liabilities for most debts, depending on your financial situation. However, before you file, you should know about the aftermath.
One important question that you need to consider when filing a Chapter 7 is what happens to your debts on your credit report. Knowing the answer to this question will ensure that you don’t face unexpected financial problems after filing.
Debts on Credit Card Report After Chapter 7 Bankruptcy
After you file a Chapter 7 bankruptcy, there is a Stay imposed by the Court whereby creditors are prohibited from engaging in any more collection activities. About 3 months after you file, or about 2 months after the 341 creditors meeting, the Court will issue an order, discharging you of you debts.
But discharge of a debt after a Chapter 7 does not erase your financial history.
All your debts will still show on your credit report. However, the report will also show that your debts are discharged and you have zero debt.
But why are your debts shown in the credit card report? Shouldn’t the debts be wiped out from the credit report once they are discharged?
To understand why credit card report shows discharged debts, you should know the purpose of the report.
Information in the credit report is used by credit agencies to assess your credit worthiness. In order to help credit agencies to properly assess your risk, the credit reporting agencies don’t wipe out debts that are discharged in bankruptcy. The debts will remain in the credit report for 10 years after filing for bankruptcy protection.
How Will Bankruptcy Status Affect Your Credit Score?
A bankruptcy can have a negative effect on your credit score; However, it is possible to Repair your credit score over time. The most effective way to restore your credit score is for a creditor to report to the credit bureau that you paid a bill. . You should consider paying your bills as early as possible as this will have a major impact on your credit score.
In conclusion, a bankruptcy will have a negative impact on your credit score. But the negative consequence will wear off with time, and you will be able to rebuild your credit. For more information on how debts will affect your credit history after filing a Chapter 7, you should contact an experienced Cleveland bankruptcy attorney.
A bankruptcy lawyer will help you not only discharge debts quickly, but also provide guidance on how to improve your credit score. You can get information on how to discharge both secured and unsecured debts by filing a Chapter 7. Moreover, he will assist you in removing false status reported in your credit report. This is a time-consuming and extremely difficult process that can only be solved with the help of an attorney.
Attorney Eli Tamkin is a Cleveland bankruptcy lawyer. He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to