How Chapter 13 And 7 Bankruptcy Affect Your Credit Score?

And, just like all of them, you too must be looking for a credit repair company that can help you in increasing your credit score. While scrolling down web pages on the Internet, if you find a credit repair company promising to create a new legal identity for a fresh start, it’s fake. Report that company. Knowing that you have had some detrimental effects on your credit score after bankruptcy, don't let anyone take advantage of your situation. Stay safe when you are in search of professional for rebuilding credit after bankruptcy.

Once you have a bankruptcy on your credit report, it will stay there for up to 10 years. Bankruptcy seriously affects your credit score. However, you cannot allow too much debt as it also affects your credit score. 

How many points you will lose and for how long bankruptcy will stay, it depends on the bankruptcy you are filing. Depending on whether you are filing Chapter 7 bankruptcy or Chapter 13 bankruptcy, your credit score will be reduced by from 160 to 220 points. A lender always checks the credit score of a borrower. So, a bankruptcy in your credit score will make it difficult to get a home loan or auto loan or a credit card approved. 

What is Chapter 13 Bankruptcy and for how long it stays on the credit report? 

If you are a debtor with regular income with unsecured debts less than $394,725 and secured debts under $1,184,200, you can file Chapter 13 Bankruptcy. You will pay the debts over time (from 3 to 5 years) and also keep the property. Once you have completed Chapter 13 Bankruptcy, it will be removed from your credit report after seven years. All the bankruptcy associated debts and the bankruptcy itself, both can be seen differently on your credit report. Some of the bankruptcy debts associated will be active until the end of your plan. 

Even when some debts are discharged, these debts will remain on your credit report longer than the Chapter 13 Bankruptcy. 

What is Chapter 7 Bankruptcy and for how long it stays on the credit report? 

If you are a debtor with limited income then you can go for this liquidation bankruptcy. You are not going to file a repayment plan as you do in Chapter 13 Bankruptcy. The bankruptcy trustee will sell your nonexempt assets and holders of claims. So, when you are filing Chapter 7 Bankruptcy, keep in mind, you are going to lose the property. This bankruptcy will be removed from your credit report after 10 years. All debts associated with the bankruptcy will be discharged within a few months after you file bankruptcy. Debts associated with the bankruptcy will be removed from your credit report before the bankruptcy itself. After 7 years, there will be no debt (debt associated with the bankruptcy) reported in your credit report. 

You can improve your credit score after bankruptcy in less time if you know how to rebuild credit after bankruptcy. Here is what you can do.

• Know your credit score regularly.
• Reestablish credit as soon as possible with secured credit cards, store credit cards or car loans. 
• Research on credit card offers.
• Keep your oldest accounts active. 
• Avoid applying for numerous accounts.