One of the most difficult decisions to make around the process of filing for bankruptcy in Florida is recognizing the potential impact it could have on your credit now and in the future.
For so many people looking at bankruptcy in Florida, however, this might be the only opportunity to receive a fresh start and move on. While it is certainly true that bankruptcy does impact your credit, it might be the only way for you to get the financial fresh start you need and start to put the pieces of your life back together so you can put this chapter behind you. Some people are under the misperception that bankruptcy can impact them for the remainder of their lives. They live in fear of not being able to get a car loan, buy a home, or use a credit card to make purchases in the future.
Filing for bankruptcy does indicate that you are at a high credit risk and means that it is unlikely in the two years after filing for bankruptcy that you will be able to take out loans or lines of credit. Given all of the advantages associated with a successful bankruptcy filing, however, you can view this as an exchange of benefits. You may be able to wipe out all your dischargeable debts by filing for Chapter 7 or get back on track financially by making consistent payments under Chapter 13.
You should do this time as an opportunity to get your financial feet under you so that you do have the opportunity to take out loans or lines of credit in the future. Many people who have filed for bankruptcy can move on and re-open a financial future after following the right advice.
As bankruptcy lawyers in Florida, we view ourselves not just as the legal arm of your filing petition, but as advisors to help you understand how to leverage this time after getting your bankruptcy approved. We know that it is one of the most common questions for all of our clients as to how they will begin to move on and have a stronger financial future so that they could do something like purchase a car or buy a home.
Lower Credit Scores
Look at your credit rating now to see the potential impact that bankruptcy could have. It is likely that if you have substantial deaths that are serious enough to be speaking with a Florida bankruptcy attorney, your credit score is already quite low. You might already be ineligible for most traditional loans or credit cards. Certainly some of this is due to your debt to income ratio, and your credit score could bounce back up after responsible spending post-bankruptcy. Research from FICO shows that filing for bankruptcy could impact a good credit score by decreasing it by as much as two hundred points. However, most people who are filing for bankruptcy in Florida we’ll have a credit score of 680 or less and can expect to lose between 130 and 150 points.
Another potential impact on your credit score depends on the type of bankruptcy file. Chapter 7 is more likely to harm your credit score than Chapter 13. Chapter 7 is recorded on your credit report for up to 10 years. Chapter 13 status can stay on your report for up to seven years. Additionally, the total number of debts and your balances can also influence the impact on your credit report.
Hiring the Right Lawyer
Although it might feel like you have no options, it’s important to discuss whether bankruptcy is the right fit for you by meeting with a Florida bankruptcy lawyer. This is your chance to get many of the most common questions answered and to get a perspective on your current debt situation and how a bankruptcy might influence it. It is certainly the case that for plenty of people, bankruptcy is the fresh start that enables them to start practicing some good habits and to get their credit back on track. If you don’t see a way out of your current financial situation and are truly struggling, oh, you’re not doing yourself any favors by continuing to stay in that position. Taking the short-term impact on your credit report will allow you to rebuild and have a better future.
Need a Florida bankruptcy lawyer who knows all the factors to take into consideration when you’re getting ready to file? We’re here to support you with your most common questions.