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It’s good to consider the pros and the cons when determining whether bankruptcy is right for you. A common concern is what a bankruptcy filing will do to your credit report and how long it will remain on your credit to deter you from getting a line of credit or a mortgage. That is why it is important to fully understand what happens to your credit after filing for bankruptcy.

It makes sense that there isn’t a cookie-cutter answer to this question. If you have been routinely late in paying your creditors and have defaulted on any loans, then you may already have a low credit score. If that is the case, the point may be moot and you may already have realized the negative effects of a low credit score.

With Chapter 7 bankruptcy, your debts are discharged. With Chapter 13, your debts are revised within a new payment plan. That means your debt to income ratio is reduced, as is the amount of credit utilized, which will begin to improve your credit. You can also take steps to improve your credit over time and, with diligence and mindfulness, make timely payments on existing debts.

A secured credit card is also a great tool to utilize because many will report timely payments and will grant you credit since the risk is insignificant.

A Chapter 7 bankruptcy will remain on your credit for a decade. A Chapter 13 filing may only remain for seven years. Surprisingly, since creditors know that unsecured debts cannot be discharged through another bankruptcy filing for at least another eight years, they may actually extend offers of credit to you.

As with any major financial decisions, it can pay to talk to someone knowledgeable in the area. Credit counselors that are legitimate may be able to help you with your creditors and payment arrangements. A Florida bankruptcy attorney may also prove to be an invaluable resource in resolving your concerns and improving your financial situation with an ever-steady eye on your credit.