I love answering reader questions! Today we got a great email from a reader named Murry, asking about the impact of filing for bankruptcy:
Hi, my wife and I would like to know how many credit score points
are removed for bankruptcy? Thanks for responding!
Basically: if Murray currently
has very high scores, he could see a drop of as much as a few hundred points. If his
credit scores are very low, he might see only a very small drop. Either way,
filing for bankruptcy will leave him with credit scores that are very low.
This is only a rudimentary explanation though. When you file for bankruptcy several things happen to your credit history. A new public record appears and your discharged debt accounts are marked as being included in the filing. Each of these changes can have a unique impact on your credit scores. One quick way to estimate the credit score impact is by using Credit.com’s free Credit Score Estimator tool.
Bankruptcy filing records remain on credit
reports for 7-10 years. Once the filing is discharged completely, Murray should be
able to start the credit score rebuilding process with a secured credit card or small loan.
If he works hard at rebuilding his credit post bankruptcy, he may be able to get a large
loan within a few years.
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