Skip to main content

Exit WCAG Theme

Switch to Non-ADA Website

Accessibility Options

Select Text Sizes

Select Text Color

Website Accessibility Information Close Options
Close Menu
Law Office of Adam I. Skolnik, P.A. Motto
  • Call Now To Schedule a Consultation

How Will Filing a Chapter 7 or 13 Bankruptcy Affect My Credit?


Filing for bankruptcy can offer relief if you are struggling with overwhelming debt. Filing for bankruptcy can allow you to start afresh. If you are struggling to keep up with debt payments and are considering filing for either Chapter 7 or 13 bankruptcy, it is understandable if you have questions. One of the most pressing questions you may have is whether bankruptcy can affect your credit, and if so, how and for how long. Simply put, filing for bankruptcy adversely affects an individual’s credit. However, filing for bankruptcy will not ruin your credit for the rest of your life. Read on to learn more.

Differentiating Between Chapter 7 and Chapter 13 Bankruptcies.

Before discussing the effects that bankruptcy will have on your credit, it is vital that we first differentiate between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy, also called liquidation bankruptcy, involves selling your non-exempt assets to pay off debts. Unsecured debts can be discharged entirely, offering you a clean slate. On the other hand, Chapter 13 bankruptcy, also called reorganization bankruptcy, entails creating a debt repayment plan spanning three to five years. With Chapter 13 bankruptcy, you can retain your assets while gradually repaying debts. Any remaining eligible debts may be discharged at the end of the repayment period.

How Does Bankruptcy Affect Credit?

Filing for bankruptcy can reduce your credit score, making obtaining new credit or loans challenging. However, there isn’t an exact number on how much your credit score will drop after you file for bankruptcy. How much your credit score decreases depends on your score before bankruptcy and the type of bankruptcy you file. Generally, the higher your credit score before filing for bankruptcy, the bigger the drop in your scores after filing for bankruptcy. According to FICO, someone with a credit score of 680 will lose between 130 and 150 points, and someone with a higher credit score of, say, 780, will lose between 220 and 240 points. Regarding the impact that the different types of bankruptcy may have on your credit score, Chapter 13 bankruptcy may have less impact on your credit score than Chapter 7 bankruptcy.

How Long Does Bankruptcy Stay on Your Credit Report?

After filing for bankruptcy, your filing will appear on your credit report. How long the filing stays on your credit report may depend on the type of bankruptcy you file. That said, bankruptcy can stay on a filer’s report for up to 10 years from the filing date. However, lenders may view Chapter 13 bankruptcy more favorably than Chapter 7 bankruptcy since, with Chapter 13 bankruptcy, you are repaying your debts through a structured plan.

Rebuilding Credit

While bankruptcy can negatively impact your credit, it is not the end of good credit. You can take steps to rebuild your credit with less stress and fewer financial burdens after filing for bankruptcy.

Contact Our Deerfield Beach Bankruptcy Lawyer

At the Law Office of Adam I. Skolnik, P.A., we understand that filing for bankruptcy can be intimidating and confusing. That is why we are committed to making the process as easy as possible for our clients. To schedule a consultation with our Deerfield Beach bankruptcy lawyer, call 561-265-1120 or fill out our online contact form.

Facebook Twitter LinkedIn

Attorney Advertising. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. By submitting this form I acknowledge that I have read and understand the terms of the disclaimer above.

By submitting this form I acknowledge that form submissions via this website do not create an attorney-client relationship, and any information I send is not protected by attorney-client privilege.

Skip footer and go back to main navigation