Filing Bankruptcy and Your Credit Score
How Ch 7 and Ch 13 Bankruptcy in Arizona Affects Your Credit
Posted on behalf of Phoenix bankruptcy Attorneys Wright & Gallagher, PLC on October 20, 2012.
Filing for bankruptcy in Arizona will have a negative effect on your credit. As a matter of fact, it is best to consider filing for bankruptcy as the least desirable option available to you when you find yourself in dire straits financially. However, sometimes there is no other option and declaring bankruptcy becomes a stern reality.
Although filing for bankruptcy in Phoenix, Scottsdale, Avondale, Tempe, or throughout Arizona might seem like an easy way to erase your debts and start over with your life it also involves many more situations that you may not be familiar with. Some of the unfortunate scenarios that you may face if choosing to file for bankruptcy protection in Arizona include, not only could you lose your home but you will also have bankruptcy stay on your credit report for an average of seven to ten years. Also, depending on the type of bankruptcy you file for, your credit report could drop by as much as 240 points just after filing. Sure, you can re-build your credit but it is necessary to realize all the negative affects bankruptcy carries with it.
For many people in Phoenix considering bankruptcy, declaring bankruptcy offers a debtor protection from lawsuits and the ability to wipe out all or a portion of his debts, but bankruptcy affects your credit in a negative fashion. A debtor who files for bankruptcy protection will see their credit score drop dramatically. Regardless of whether you file under Chapter 7 or Chapter 13, filing bankruptcy in Phoenix will continue to affect your credit long after the bankruptcy case is complete or “discharged” by the Arizona bankruptcy court.
Yes, it is true that filing a chapter 7 or chapter 13 bankruptcy will have a negative affect on your credit file for up to ten years. Your credit score will be affected negatively by declaring bankruptcy. However, in today’s ever-changing society and with the current recession the negative connotations filing bankruptcy leaves on your credit report is considered less and less important as there are more and more people either in a poor financial situation or in the bankruptcy boat.
There are many programs that can help you re-build your credit after filing bankruptcy and you can rebuild your credit fairly quickly after declaring bankruptcy in Phoenix, Maricopa County, or throughout Arizona. An experienced debt relief expert can guide you through the best ways to not only prepare for your bankruptcy but also how to re-build your credit after filing for bankruptcy protection. If you are considering either chapter 7 or chapter 13 bankruptcy, consult an experienced Phoenix bankruptcy lawyer to assist you in your quest for a fresh start.
Wright & Gallagher, PLC
668 N. 44th St., Ste 320
Phoenix AZ 85008
Office: (602) 568-7410
Wright & Gallagher, PLC
7135 East Camelback Road, Ste 230
Scottsdale AZ 85251
Office: (602) 753-7440