What Will Happen To My Credit Scores After I Declare Bankruptcy?

There are few decisions more traumatic than having to declare personal bankruptcy. As an experienced bankruptcy attorney Las Vegas, I understand that you have all kinds of questions and stresses as you consider that move. One of your first thoughts might be on the effect a Chapter 7 or Chapter 13 bankruptcy is likely to have on your various credit reports. That’s an important consideration since the content of your credit reports can determine your ability to get credit, buy a house or car. It could even impact your ability to get your next job.

As you can imagine, your bankruptcy will have repercussions. While your credit scores will certainly take a hit, the good news is that the damage cures itself over time as long as you don’t repeat past mistakes. Let’s take a closer look.


About that hit: bankruptcy will cause your credit score to drop rather dramatically. If you started with a very good 700 score, for instance, your new score might fall to 500 or less. In fact, the damage can actually be more apparent to those who previously had high scores, compared to those whose numbers had already fallen.

On the other hand, you probably preceded the bankruptcy with months or even years of slow payments and maxed out credit cards, so your score might have already been an impediment to securing credit.


Stay tuned for good news to follow. But yes, your poor scores will stay with you awhile. It could be quite awhile, actually. Whether you declared Chapter 7 or Chapter 13, your bankruptcy could remain on public files for somewhere between seven and ten years depending on a variety of factors. So it will negatively impact your credit scores for this long.


Told you there would be some good news along the way. The truth is that while your credit scores will plummet due to that initial shock of bankruptcy, you could start regaining a little altitude almost immediately. For example, remember all of those maxed out credit cards that were holding down the numbers like an anchor? Well, now they’re off the scorecard, and that will help polish your credit utilization rate (your amount of debt carried vs. your total credit limit) a little.

Now think about all of those smart budgeting and spending strategies you learned, and all you learned not to do, through tough experience. Your new attitude toward your personal finances and the fresh start given to you as part of your bankruptcy are going to work wonders. Just be sure to regularly review your credit reports and work diligently to correct any errors.

And if you’re considering the hard decision to declare bankruptcy, start by calling an experienced bankruptcy attorney Las Vegas.

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