When thinking about your next steps for your future financially, it’s easy to fall prey to information that may be well-meaning but isn’t accurate. If bankruptcy is the right step for you, you should know how to handle this situation and what you need to do to protect yourself.
Common Myths About the Fresno Bankruptcy Process
If you are struggling with debt, you may wish to avoid bankruptcy for fear of the damage it could do to your credit. However, contrary to popular belief, carrying large balances for long periods of time indicates to potential creditors that you are a risky investment. Even if you pay your minimums, the effects of long-term debt can often do far more damage than filing bankruptcy.
If you have questions about how bankruptcy could affect your credit, we at The Winter Law Group can help you. We represent people in Fresno, California, and throughout the Central Valley through the bankruptcy process, including life after bankruptcy. We will help you understand the relationship between bankruptcy and credit so you can make an informed decision to achieve debt relief.
How Does Bankruptcy Affect Credit?
Chapter 7 will remain on your credit report for 10 years, while Chapter 13 will be reported for seven. While it is true that filing may lower your credit score, you can begin re-establishing your credit-worthiness almost immediately after your bankruptcy successfully closes.
Outside of bankruptcy, you may not realize that your credit does not improve with each debt you pay off — only when the last debt is paid off will your credit start to recover. However, bankruptcy discharges all debts at one time. From that moment on, you can begin to rebuild your credit to gain financial stability and improve your credit risk after bankruptcy.