How Does Filing for Bankruptcy Impact My Credit Score in Mississippi?

On Behalf of developers | June 2, 2024 | Bankruptcy,Blog,Chapter 13 Bankruptcy,Chapter 7 Bankruptcy,Debt Relief

At Pond Law Firm, we’ve been helping individuals and businesses with all aspects of bankruptcy for decades. Over this time, we’ve heard some common questions emerge. Many of these questions revolve around credit scores after bankruptcy, such as, “How much does your credit score drop when you file for bankruptcy?” Or, “How soon will my credit score improve after bankruptcy?” And, “Can you get an 800 credit score after Chapter 7?” These are important questions to ask and our bankruptcy legal services cover every step of bankruptcy. From the very start to life after bankruptcy, Pond Law Firm is here to answer all your questions and more! 

How Bankruptcy Affects Credit Scores

When you file for bankruptcy, there is a drastic drop in your credit score upon doing so. How much your credit score drops depends largely on where your score was when you filed and what type of bankruptcy you filed. You will most likely see at least a decrease in your credit score of 100-200 points, although each situation is unique.

How long can you expect your credit score to be affected by bankruptcy? Filing for Chapter 7 bankruptcy stays on your credit report for 10 years. Chapter 13 bankruptcy, on the other hand, stays on your report for 7 years, including the 3-5 years during which you’re following your court-structured repayment plan. 

How does bankruptcy affect your ability to get a line of credit? Since a bankruptcy shows up on your credit for up to 10 years, during those years, you may have a more difficult time obtaining a line of credit. Lenders see you as a higher risk and so you may face low credit limits, high interest rates, or be denied credit from a lender altogether. 

How to Improve Your Credit Rating After Bankruptcy

All is not lost! You can rebuild your credit after bankruptcy and Pond Law Firm is here to help you through that process. Our financial and legal counsel do not end upon the completion of your bankruptcy filing. We are passionate about helping guide our valued clients through to a solid, healthy financial life after bankruptcy is said and done. 

The best approach is to seek assistance from our experienced bankruptcy lawyers who can give you advice and guidance based on your specific situation. With that said, there are a few steps that anyone who has undergone bankruptcy can take to begin rebuilding credit.

• Obtain a secured credit card: These are credit cards those with lower credit can obtain because you will give a deposit as collateral. By making small purchases on this credit card and making consistent payments, you’ll begin to improve your credit.
• Make consistent payments: It’s vital to make any payments after bankruptcy on time. This includes any court-structured payments, new credit accounts, or existing payments on assets (if you were able to keep any assets during bankruptcy).
• Take out a credit builder loan: There are lenders who will give a small loan designed to help you demonstrate responsible payment. Taking out such a loan and consistently paying can slowly build up your credit score. 
• Continue financial counseling: Pond Law Firm can help you with life after bankruptcy and we offer financial guidance and counseling to ensure you stay on a healthy financial path.

For all your bankruptcy needs, before, during, and after filing bankruptcy, contact Pond Law Firm. We proudly serve residents across Mississippi.