Credit Repair After Bankruptcy in Dallas

If you are considering bankruptcy, your credit score is likely low already. However, you may be concerned about how low it will go if you file for bankruptcy. In actuality, the damage that bankruptcy will have on your credit score depends on how your credit was prior to filing.

If you have many accounts that are delinquent with late payments and your debt-to-asset ratio is high prior to bankruptcy, then your score is likely already low. Filing for bankruptcy will eliminate late payments and reduce your debt-to-asset ratio. Thus, although the bankruptcy will negatively impact your score, it will also have some positive impact. Your score may not drop as low as you think it will after bankruptcy.

However, if you have very few late payments and simply don’t feel like you can keep making those payments, then your credit score may take a bigger hit. It’s best to consult with a bankruptcy attorney before filing for bankruptcy in Dallas so that you can understand your options and how bankruptcy will impact you specifically, and the steps you can take to repair your credit afterward.

Bankruptcy in Dallas will give you relief that can help you with rebuilding credit over time. Although the bankruptcy will appear on your credit report for several years, it will reduce the impact of other negative aspects of your credit quickly. A Chapter 13 bankruptcy will be on your credit report for seven years, and a Chapter 7 bankruptcy will be on it for 10 years. There are exceptions, and credit reporting agencies may continue to report your bankruptcy longer than 10 years in specific situations.

Bankruptcy will reduce your overall debt ratio and remove the negative impact of late payments and many other credit killers. So, while a bankruptcy itself will also negatively impact your credit, the impact of all the other negative pieces that could be fixed by bankruptcy may be much greater.

Working hard at rebuilding credit after bankruptcy can be difficult, but over time, it will happen. A financial advisor can help you understand exactly how bankruptcy will impact your credit score.

If you have made the decision to file for Chapter 7 or Chapter 13 bankruptcy, you have probably heard that it could have a negative impact on your credit score. While this may be true, it is important to remember that the effects of your bankruptcy do not have to be permanent. If you take the right steps to rebuild your credit after bankruptcy in Dallas, it will not be long before your credit score bounces back.

There may be characteristics of your credit history that will help you in rebuilding credit after bankruptcy. Your credit score factors in many aspects of your credit history. The following factors can improve your credit score even if you’ve recently filed for bankruptcy in Dallas:

• Long-term credit history;
• Good payment history;
• Low debt-to-asset ratio; and
• Low number of credit items you’ve applied for.

When rebuilding credit, you need to keep the aforementioned factors in mind. You should not close your oldest credit cards unless absolutely necessary. Instead, pay them off and don’t use the cards. This will improve your long-term credit history. Also, maintain regular payments and avoid late payments. Try to maintain a low debt-to-asset ratio, which can be improved through bankruptcy. Also, don’t apply for too many new credit accounts. If you have several credit checks on your report, it can negatively impact your credit score.

While you are rebuilding your credit after bankruptcy, you will have an opportunity to get home mortgages, car loans, and more in Dallas. However, you should carefully consider your financial situation before getting into debt again. You may have many options for personal loans. You should work with a financial advisor before taking any significant financial steps after bankruptcy.

After your bankruptcy concludes, you will likely be able to get a car loan immediately. However, the terms of that loan will likely be less than premium. It may have an extremely high interest rate, or you may be required to put up a significant amount for a down payment. It’s often best to wait some time until you can qualify for a better quality car loan.

Most banks will want you to wait a few years after bankruptcy before you obtain a new mortgage. Some FHA-insured loans may be available to you within a year after Chapter 13 and two years after a Chapter 7. However, other loans may require more of a wait time after your bankruptcy concludes.

Rebuilding credit after bankruptcy can be extremely difficult. However, home mortgages, car loans, business loans, and more will be an option to you eventually.

If you have questions about bankruptcy, including how it could affect your credit score, we encourage you to speak with a bankruptcy attorney at Allmand Law Firm, PLLC. As the largest bankruptcy filing firm in the state, we have helped thousands of people regain control of their finances. We can help you with credit repair after bankruptcy in Dallas.