Your Credit Score will be affected whether you file Chapter
7 or Chapter 13. But which is worse on your Credit? In this
article I will discuss the Pros and Cons in regards to how
each bankruptcy will affect your personal credit rating.
Over the years in the Mortgage Industry I have dealt with
the affects of these different bankruptcies, and how each
one affected your ability to get financed. I know that each
has its purpose, but I do know which one I would not file
personally.
A chapter 13 bankruptcy is where the lawyer gets most of
your debts consolidated into a payment you can afford. You
make these payments to a trustee for a period of time. This
particular bankruptcy is the one I would prefer over
Chapter 7. One of the main reasons is the lenders look at
Chapter 13 less harshly than a Chapter 7. The main reason
is you are attempting to pay back your debts. You can get a
mortgage if you are in a Chapter 13. You cannot get a
mortgage if you filed Chapter 7 for usually 2 years.
Chapter 13 stays on your credit report for 7 years. A
chapter 7 stays on your credit report for 10 years. So you
can begin to see how a Chapter 7 is going to affect your
credit rating vs. Chapter 13. Typically Chapter 7 sounds
like the better way to go, but think twice before you file.
Once you make your decision, the last thing you want to do
is have regret, because of the credit impact each one has.
Chapter 7 is where you wipe out all debt and there are no
requirements to pay back your debts what so ever. There are
big repercussions to your credit score when you file
Chapter 7. Chapter 7 is the ultimate death of your personal
credit. This particular bankruptcy stays on your credit for
10 years. There are certain situations where you must file
Chapter 7. but if you don't have to file chapter 7 don't.
This bankruptcy takes more time to recover from, and
lenders don't like seeing it on your credit report.
Typically it is easier to re-establish your credit with
Chapter 13 vs Chapter 7. So I think you get the picture how
your credit is affected either way. It is always better to
pay your debts back if you can, and not file Bankruptcy at
all. Just remember your Credit is your life.
----------------------------------------------------
About the Author: Mike Clover is the owner of
http://www.my720fico.com . My720fico.com is one of the most
unique on-line resources for free credit score reports,
Internet identity theft software, secure credit cards, and
a BlOG with a wealth of personal credit information. The
information within this website is written by professionals
that know about credit, and what determines ones credit
worthiness.
No comments:
Post a Comment