Bankruptcy is a complicated process and a decision that should not be made lightly. However, many find themselves unable to break the debt cycle, and bankruptcy can offer much-needed relief to those in debt. One reason many are unsure of whether or not they should file is because of the impact it can have on their credit. As such, you may wonder if it’s possible to remove bankruptcy from a credit report early. The following blog explores how this decision will impact your credit score and if there are any circumstances in which a filing can be removed early. You’ll also learn why enlisting the guidance of a Shelby County, TN bankruptcy lawyer is critical during these complicated issues.
How Will Bankruptcy Impact My Credit?
When you file for bankruptcy, you are essentially seeking relief for the debt you are in. How this relief happens will depend on the type of bankruptcy you choose to file. If you file Chapter 7, your assets will be liquidated to pay off creditors before discharging the remaining debt. Pursuing a Chapter 13 filing puts you on a three-to-five-year repayment plan, and once the plan ends, your remaining debt will be forgiven. However, there are consequences for filing, otherwise everyone would file for bankruptcy to discharge their debts constantly.
When you file for bankruptcy, your credit score will drop drastically. Unfortunately, the higher your credit score is to start, the further it will drop. For example, if your credit score is 780 when you file, you could lose up to 240 points. This is considered a negative and thus will impact your score for years.
For Chapter 7, the listing will remain for ten years, while a Chapter 13 filing will remain for seven.
Is There Any Way to Remove Bankruptcy From a Credit Report?
It’s important to understand that, unfortunately, once you file for bankruptcy, it will remain on your credit report for a pre-determined amount of time. It is only under unique circumstances that you can have bankruptcy removed from your credit report before the seven or ten-year mark.
If the information regarding your bankruptcy filing is incorrect on your credit report, you can dispute the inclusion of this information Additionally, if a creditor files involuntary bankruptcy against you without grands, you can fight the inclusion of this information on your report.
If neither of the following applies to your circumstances, unfortunately, you’ll need to wait and work on rebuilding your credit score in the meantime. You can apply for rebuilder credit cards that will help you improve your credit score, for example.
Filing for bankruptcy is a complex process and it’s imperative to understand the importance of connecting with an experienced attorney for assistance. Unfortunately, navigating this process on your own will likely result in a negative outcome, like your case being dismissed. As such, the Arnold Law Firm is ready to help. We are proud to represent those around Tennesee receive financial relief. If you’re ready to move forward with bankruptcy, contact us today to learn how we can help.
