Contrary to what many people think, filing for bankruptcy may be good for you and improve your financial situation. Chances are that if you are considering bankruptcy, your credit is already suffering, and you are probably sick of being harassed by bill
collectors and creditors, and faced with possible wage garnishments, evictions, lawsuits, and foreclosures. Not only does all that activity stop with bankruptcy, but bankruptcy can help your credit. Many of your debts will be eliminated, and although there will be an initial setback in your credit rating, after bankruptcy credit starts to rebound quickly, and you will typically wind up with an improved credit score. The experienced and compassionate Ohio bankruptcy attorneys at
Fesenmyer, Cousino, Weinzimmer understand that financial problems can happen to the most hard-working and well-intentioned people. We offer a free consultation to examine your individual financial situation, your debts, and your goals. Should bankruptcy be your best option, we will help you get on the path to financial solvency and find the best ways to make sure your credit recovers as quickly as possible. Contact us online or call to set up your free consultation today. The two most common types of consumer bankruptcy are Chapter 7 and Chapter 13. Chapter 7 will discharge (eliminate) most or all consumer debts so they do not have to be paid. Chapter 7 is over in a few months and you can begin rebuilding credit quickly, but it will remain on your credit report for 10 years. Chapter 13 is a reorganization plan that allows you to consolidate your payments to avoid fees and fines and repay some or all of your debt affordably over a three to five-year period. If you successfully complete the payment plan, the debts covered by the plan are discharged. Chapter 13 will remain on your credit report for seven years. Bankruptcy and Credit ScoresAccording to researchers at the Federal Reserve Bank of Philadelphia, Equifax credit bureau credit scores typically plunged in the 18 months before filing bankruptcy, but rose steadily afterward. For example – Equifax found the average credit score for someone filing Chapter 7 in 2010 was 538.2, but within six months, their average score rose to 620.3. For Chapter 13, those who completed their repayment plan and got a discharge had scores that rose on average from 535.2 to 610.8. Other Benefits of BankruptcyImproved credit scores are just one reason to consider filing for bankruptcy. Others include: 1) Discharge of certain debts Chapter 7 bankruptcy wipes out many kinds of debt, including:
There are some debts, such as child support and recent tax debt, that bankruptcy does not eliminate, but by having major categories of debts wiped out, you will better be able to pay the debts that remain. 2) Automatic Stay Once you file for bankruptcy, the “automatic stay” provision halts almost all collection efforts. Harassing phone calls and letters stop, as do threats of lawsuits and wage garnishment, which end completely once the underlying debt is erased. 3) Better access to credit The researchers found that people who have completed bankruptcy are more likely to be granted new credit lines within 18 months than are people who fell 120 days or more overdue but didn’t file. After bankruptcy, you may be in a better position to get credit because you reduce your debt-to-income ratio. Also, because you won’t be able to file Chapter 7 again for another eight years, or Chapter 13 for two to four years, you may appear to be a better risk. If you want to refinance your home, Chapter 13 homeowners may be eligible to refinance after a year, while Chapter 7 homeowners will be eligible two years from the date of discharge. Improve Credit After BankruptcyOnce you have filed for bankruptcy, there are things you can do to help your credit improve:
Contact Us For Help You Can TrustGoing through bankruptcy is difficult, but with help and guidance you can rebuild your credit and your life successfully. The seasoned and compassionate Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer understand the issues and the difficult decisions involved. We provide our clients with a high level of personal service to help you deal with your financial problems, make better choices in the future, and decide on solutions that make sense in your individual case. Contact us at one of our office branches for a free consultation so we can determine what debt relief solutions will work best for you. Attorney Tom FesenmyerAttorney Thomas M. Fesenmyer (Tom) is dedicated to helping his clients solve their financial issues in a timely and cost-effective manner. Tom has personally filed several thousand cases and has the expertise to achieve immediate results for his clients, including stopping Foreclosures, Repossessions, Wage Garnishments, Law Suits, Utility Shut-offs, Creditor Harassment, Bank Attachments, and Pay-Day Loans. Tom’s goal for all of his clients is asset protection and debt elimination.[ Attorney Bio ] Debt Collections after COVID in OhioWe may be past the worst days of the COVID-19 pandemic, but the financial hardships that it has caused for so many Ohioans continue. Debt collections after COVID-19 in Ohio are in full force for some. While some COVID-19 debt collection restrictions are still in place, others have subsided. If you a... Will my credit score go up after Chapter 13?According to FICO, your recent payment history has the biggest impact on your credit score, comprising 35% of your credit score. Based on an improved debt-to-income ratio and restored timely payments to creditors, 65% of your credit score factors are improved through filing Chapter 13 bankruptcy.
How long does it take to get good credit after Chapter 13?Unlike a Chapter 7 bankruptcy, a Chapter 13 bankruptcy stays on a consumer's credit report for just seven years. In general, though, it takes anywhere from 12 to 18 months to start improving your credit score after your Chapter 13 bankruptcy is discharged.
How long does it take to remove Chapter 13 from credit report?This bankruptcy type allows people with regular income to develop a repayment plan for part or all their debt. Chapter 13 bankruptcy is typically removed from your credit report seven years after the date you filed, and this is done automatically.
What happens to your credit score after chapter 13?Since your credit score is based on the information listed on your credit reports, the bankruptcy will impact your score until it is removed. This means a Chapter 7 bankruptcy will impact your score for up to 10 years while a Chapter 13 bankruptcy will impact your score for up to seven years.
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