Ask Doan Law Firm: How Will Bankruptcy Affect My Credit?

By admin • December 16th, 2010

For the bulk of people contemplating bankruptcy, their credit has already been severely damaged.  Each creditor reporting negatively every month takes a heavy toll on a credit score.  For clients whose credit score is still standing, they’ve been engaging in expensive juggling that takes a personal toll.

Bankruptcy stops the constant negative reporting so the positive ones can take an effect.  So while it has a dramatic effect, it allows credit to recover.

Once your bankruptcy is discharged, you will immediately be offered low balance secured credit cards.  Using those cards will begin to rack up positive points on your credit.  Also helpful are payments on any house or car you keep through bankruptcy.

After bankruptcy your credit will recover and build much more quickly than when you were just starting out.  FHA regulations permit lending two years after a bankruptcy.  With very little effort, your credit will recover quickly.

 

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