You Have the Choice to Take Back Control of Your Financial Future.

Will my credit be ruined forever if I file for bankruptcy?

On Behalf of | Feb 12, 2021 | Chapter 7 Bankruptcy

These days, many people in Miami may be struggling financially but they may feel too afraid to file for bankruptcy. After all, for some filing for bankruptcy has a negative stigma and they may fear they will never recover financially from a bankruptcy filing. However, neither of these things are true. Filing for bankruptcy is a good way for many people in Miami to cope with debt they simply cannot pay back, and it is possible to repair your credit following a Chapter 7 bankruptcy filing.

What is Chapter 7 bankruptcy?

Chapter 7 bankruptcy is also referred to as “liquidation bankruptcy.” While there are many exemptions that allow you to keep important assets, your other assets will be sold by the bankruptcy trustee and the proceeds will be used to pay back your creditors, after which many of your debts will be extinguished. Chapter 7 bankruptcy can be an efficient and effective way to deal with unmanageable debt.

Can my credit recover following a Chapter 7 bankruptcy filing?

Filing for Chapter 7 bankruptcy will damage your credit, at least for a time. However, there are ways you can repair your credit following a Chapter 7 bankruptcy filing. First, if there were any debts that were not discharged, paying these debts on time can help.

There are also ways to obtain new credit accounts. One way is to obtain a secured credit card. With a secured credit card, you will put down a security deposit. After making timely payments for at least 12 months, your creditor may convert your secured credit account to an unsecured credit account.

Another option is to have someone co-sign a loan with you. This may be a relative or friend with good credit. If you choose this option, you must make sure you make all payments on time and in full. If you fail to make payments, it could affect your co-signer’s credit score as well.

Learn more about Chapter 7 bankruptcy

Ultimately, this post does not offer legal or financial advice. Those who want to learn more about how filing for bankruptcy can help them may find our webpage on Chapter 7 and Chapter 13 bankruptcy useful.

Archives