Will Your Credit Score Go Up After the 10 Year Mark of Bankruptcy Passes?

Filing for bankruptcy protection can be a breath of financial fresh air if you financially need a fresh new start, but a bankruptcy will be reported and remain on credit reports for up to 10 years. So, does the credit staleness remain the first ten years after bankruptcy, or will your credit score go up after your chapter 7 bankruptcy passes the 10 year mark?

Strangely enough, the reporting of a bankruptcy changes your credit scores very little. FICO scores range from 300, the least creditworthy, to 850, the most creditworthy. Credit scores change for a multitude of reasons. By the time you file for bankruptcy, your credit score has most likely fallen to a less creditworthy rating. Here, you rarely will go below 300 as long as you have some type of credit. Only those people with no credit history have less than a 300 score. So, filing a bankruptcy drops your score just so far.

After you have filed for bankruptcy, your score has been effected only to the point of your next credit action. If you start making positive actions towards your credit, like making timely payments on rent or utilities, your credit will begin to rise despite having the bankruptcy on your report.

What this basically means is filing for bankruptcy protection can eventually have a positive effect on your credit scores. If you file a Chapter 7 bankruptcy, commonly called liquidation of your assets, the discharging of bad debts can have a positive effect on your scores because these transactions will no longer count against you since you no longer legally owe the debts. Technically, although the debts have not been paid, they have been satisfied by the law by being legally discharged.

Filing a Chapter 13 bankruptcy can also have an eventual positive influence on your credit scores. A Chapter 13 bankruptcy, commonly called a wage earner’s plan, enables individuals with regular income to develop a plan to repay all or part of their unsecured debts over three or five years.

Making timely payments to a bankruptcy trustee in a Chapter 13 plan can have the positive effect of raising your credit score. Again, if you arer paying your rent, utilities, secured loans, and phone services on time during the plan, these positive actions will have a positive effect on your credit report.

Will your credit score go up after your Chapter 7 bankruptcy passes the 10 year mark? After 10 years, your bankruptcy should be removed from your credit report, but it may not necessarily cause your credit scores to significantly rise. Your credit score may have been rising during the ten year period due to the positive credit actions of paying your bills on time. If this is the case, your score may improve only slightly after the bankruptcy is removed, and if you have a history of negative actions during the 10 year period, removing the bankruptcy will do little to negate your history.

If you live in or around the metropolitan area of Knoxville, Tennessee, contact us here today at www.bankruptcy7-13.com . We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.


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