People who are considering bankruptcy often believe that their credit rating will be permanently ruined if they file. However, the truth is that you can re-establish your credit, typically within two years of a bankruptcy filing.
The Law Offices of Chad M. Hayward, P.C., helps people in Illinois take control of their finances. Our experienced bankruptcy attorney will examine your finances and discuss your debt relief options with you. To schedule a free consultation, please call 312-867-3640 or contact us online.
How Bankruptcy Affects Your Credit
A bankruptcy can remain on your credit record for up to 10 years. Even before it is cleared from your record, however, you may find that your credit rating improves. Creditors examine your debt-to-income ratio when they decide whether to offer credit. After you successfully complete bankruptcy, your debt-to-income ratio will be much improved.
One important step you can take is to obtain a copy of your discharge as proof that all dischargeable debts have been cleared. You can get a copy of your discharge by contacting the clerk’s office of the United States Bankruptcy Court of the Northern District of Illinois.
When you have the discharge report, you should check your credit report three months after your bankruptcy is complete to make sure all discharged debt has been removed. If there are errors, you will have proof of the discharge to give to the credit reporting agencies so the errors can be corrected.
You can work to improve your credit after bankruptcy by taking a few simple steps:
Unless you live in a city with excellent public transportation, a car is a necessity for daily life. Sometimes, we have to purchase a car under less-than-ideal circumstances such as after filing for bankruptcy. Though it may be more difficult, it is possible to get an auto loan after bankruptcy.
There is life after bankruptcy, including the opportunity to rebuild your credit. A Chapter 7 bankruptcy will stay on your credit record for 10 years. Chapter 13 bankruptcy appears on credit reports for seven years. However, you do not need to wait until the bankruptcy comes off of your credit report before you purchase a vehicle.
Bankruptcy has become much more common over the last decade. While it is a serious matter, creditors have learned that people who file bankruptcy can be creditworthy again in a relatively short time.
If you need a car now, there are steps you can take to improve your chances of receiving an auto loan such as:
Reach us to schedule an appointment at any one of our local community offices by calling 312-867-3640.