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Bankruptcy will affect credit but does not cause permanent damage

| Jun 25, 2019 | Chapter 13 |

For many Louisiana residents, their finances may have them starting each day off with dread. They may worry that creditors will call, that they will not have enough funds to buy necessities or that their credit cards will be declined. Though bankruptcy is a step that helps many people address this type of ordeal, it is common for parties to worry about how it will affect their credit.

It is true that bankruptcy will have an impact on petitioners’ credit reports and scores. From the date that a person files his or her petition, the bankruptcy will typically remain on that individual’s credit report for 10 years. However, some Chapter 13 filings may only remain for seven years. Still, that does not have to mean that a person’s financial affairs will remain in dire straits for a decade. In fact, after completing bankruptcy, parties can take steps to improve their credit.

Though a person may successfully complete a bankruptcy case and have some debts discharged or paid back, it is important that he or she stays updated on the information included in the credit report. These reports should show that debts were discharged or otherwise handled during bankruptcy. If they are not removed in a timely manner, it may warrant further action.

Understanding how bankruptcy could affect one’s credit is certainly worth knowing. Of course, it is also important to remember that credit can be rebuilt over time and that taking this debt relief route does not mean that Louisiana residents’ financial affairs will be ruined. In fact, Chapter 13 may be able to help qualifying individuals get back on track.

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