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Bankruptcy Attorney Gainesville

Does Filing Bankruptcy Affect Credit Score?

The simple answer is Yes, filing for bankruptcy does affect your credit score.  There is a lot that goes into how much your credit score will be affected by filing bankruptcy, and depends on each individual situation.  Using the courts to erase all of your existing unsecured debts and not following through on the promise to repay the money you owe to your creditors, does not create a good case for your ability to borrow money in the future.  Because the affect that filing for bankruptcy has on your credit score and your financial future, it is important to seek advice from a Gainesville Bankruptcy Attorney to determine whether filing bankruptcy is your best option.

How much will your credit score drop after filing bankruptcy?

There is no exact number of points that is guaranteed to fall off your credit score upon filing for bankruptcy.  Every situation and every individual that files bankruptcy will experience a different point loss.  On average though, you can expect to see anywhere between 100 and 150 points lost from your credit score following filing for bankruptcy.  Where you fall in the range is proportional to what your score was before you filed, meaning that if you had a higher score, your point loss will be on the higher end of that range, and if you had a lower score prior to filing, you will lose on the lower end of that range.  It is also important to remember that being 30 and 90 days delinquent on your bills will affect your credit score, which means that you could be losing points before you even file for bankruptcy.

What affect does bankruptcy have on Credit worthiness?

Credit worthiness is generally viewed as the likelihood that you will default on a loan.  Filing for bankruptcy and having a low credit score will lower your credit worthiness a great deal.  Filing for bankruptcy means that you have defaulted on loans and asked for forgiveness because you were not able to pay them back.  Thus, filing for bankruptcy basically lowers your credit worthiness to zero, meaning that no financial institution believes that you will repay their loan.  As a result, you will most likely not receive any credit offers for the first few years following bankruptcy filing, and only poor terms following that.  It can take several years before you have improved your credit score and credit worthiness enough to be able to receive respectable terms on a credit card, loan, or mortgage.

When you file for bankruptcy you will find it difficult to make any major purchases for several years after you have filed.  While this may make life difficult at times, it is not a permanent effect and can help you learn to spend within your means.  By carefully budgeting, spending wisely, and managing your money properly, you can slowly build your credit score to a reasonable level where you will be able to receive credit offers again. 

While the after effect of filing for bankruptcy can seem difficult, for anyone that is struggling to keep their head above water financially, bankruptcy can offer an opportunity to start fresh and live comfortably.  To make sure that bankruptcy is right for you and you fully understand how the process works, call the Law Offices of Justin McMurray today and schedule your free bankruptcy consultation with an attorney in Gainesville.


 

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Gainesville Bankruptcy Office:
Law Offices of Justin McMurray, P.A.
2135 NW 40th Terrace, Suite C
Gainesville, FL 32605
(352) 519-4299

10175 Fortune Parkway Suite 603, Jacksonville, FL 32256