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One of the biggest fears people have about bankruptcy is how it will affect their credit scores. If you no longer know how to manage your overwhelming debt, bankruptcy may be a great option to help you get a fresh start with your finances. To help you ease your mind about how filing for bankruptcy might impact your credit score, our Indianapolis bankruptcy lawyers break it down for you.
How Bankruptcy Impacts Credit Scores
Building credit has become a staple in our financial lives. Credit helps us get loans and make major purchases. However, if you are struggling with making payments and are drowning in debt, maintaining a high credit score should not be your top priority. Getting rid of your debt is a great way to help you get a fresh start with your finances, which can help you get an even higher credit score than the one you might have now.
Bankruptcy is a tool that has benefited many people’s financial situations – however, it will likely impact your credit score. The impact bankruptcy may have on your credit score is largely based on where your credit stands now and what information is on your credit report. According to myFICO, a high credit score (740+ credit score) can expect a huge drop in their score, compared to someone with a "modest" score (less than 669). Another factor to consider is the number of accounts included in the bankruptcy filing.
If credit problems have already pulled your score into the 500-range, you have a little less of a credit score to protect. Therefore, your bankruptcy filing might not have as big of an impact as you think.
How to Determine the Impact Bankruptcy Will Have on My Credit Score?
The best way to determine how bankruptcy will affect your credit score is by speaking to an experienced bankruptcy attorney. An attorney will be able to analyze your situation and help you determine possible outcomes related to your credit. An attorney can also help you rebuild your credit after filing for bankruptcy.
Need help with your bankruptcy case? Contact our Indianapolis bankruptcy attorneys today at (888) 713-5148!