Bankruptcy is a useful tool that can help you regain your financial footing if you are facing insurmountable debt. One of the most common types is Chapter 7 bankruptcy, which can be filed by either individuals or business entities. This is usually the fastest way to discharge debt. You don’t get a totally clean slate, however; filing for Chapter 7 bankruptcy will impact your credit rating.

How Chapter 7 Bankruptcy Impacts Credit

When you file for Chapter 7 bankruptcy, a trustee will be appointed to handle your case. They will review your paperwork and handle the liquidation of your assets, meaning that any nonexempt items of worth may be sold off to pay back creditors. If you do not have any nonexempt assets, the creditors won’t be paid back.

A Chapter 7 filing usually takes only three to four months until debts are discharged, but the fact that you filed for bankruptcy will remain on your credit report for up to ten years. Usually the discharged debts will drop off the report after about seven years. It’s impossible to predict exactly how far your credit score will drop, but it could range from 150 to 240 points.

What a Lawyer Can Do to Help

Don’t stress; you can build a healthy credit score again after bankruptcy — and usually much more effectively than if you had foregone filing altogether. First, get an attorney to advise you on whether Chapter 7 or 13 bankruptcy will best suit your needs. They can also file the paperwork on your behalf, correctly and promptly.

After this, your lawyer can draw up a tailor-made plan to get you back on your feet financially. For instance, you will want to get a secured credit card and start making regular payments to rebuild your credit score. Investing in gas or shopping cards can also boost your rating. These are just some of the tips a skilled bankruptcy attorney will have for you.

With over 16 years of bankruptcy experience, Bueker Law Firm in Stuttgart, AR, has the expertise to answer all of your questions on the topic. Whether you are just thinking of filing or want personalized advice on how to rebuild your credit score, these attorneys can help. Find out more about their services online. For an appointment, call (870) 673-1313 today.