The Law Office of Robert C. Hahn, III, P.S.
Business Attorney
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(509) 921-9500
2906 N Argonne Rd, Millwood, WA 99212, USA
Opening Hours:Monday: 9:00 AM – 5:00 PMTuesday: 9:00 AM – 5:00 PMWednesday: 9:00 AM – 5:00 PMThursday: 9:00 AM – 5:00 PMFriday: 9:00 AM – 3:00 PMSaturday: ClosedSunday: Closed
Area Served:Within 4 miles (6.4km) of 2906 N Argonne Rd, Millwood, WA 99212, USAGet more exposure
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How Long Does a Bankruptcy Stay on Your Credit Report?
Most creditors will tell you that a Chapter 7 Bankruptcy will stay on your credit report for 10 years and a Chapter 13 Bankruptcy will stay on for 7 years. But I think it’s more important to focus on what a bankruptcy does for your future credit score and ability to rebuild your finances.
A person that files bankruptcy typically goes from a lot of debt to no debt within 90 days if they file a Chapter 7. That is a big deal. Most creditors would be willing to extend credit to a person with no debt or little debt rather than a person with a lot of debt.
Most people that file bankruptcy do so as a last resort because they have no other way to repay the debt and will likely be unable to pay it back in the future. If they didn’t file, then they would be subject to collections, lawsuits, wage garnishments, bank garnishments, and the debt appearing as unpaid on their credit report. Bankruptcy stops this cycle and wipes out the debt, showing that it’s discharged and no longer a legal obligation owed.
A person that files bankruptcy can go from a lot of debt they cannot pay to no debt very quickly. In this situation, the person who actually filed bankruptcy is in a better financial position to rebuild and have a stronger ability to pay new debt obligations on time. This person also stops the negative credit reporting and can start creating positive reporting to rebuild their credit score.
Most people that file bankruptcy can rebuild their score high enough to qualify for a home purchase within two years of filing bankruptcy. Most home lenders will also loan to people who filed for bankruptcy two years after the date they filed. Of course, they would have to meet all the other requirements that the lender has, but the prior bankruptcy filing should not be a limiting factor to buy a home.
To speak to a bankruptcy attorney in Spokane, Washington, contact us for a free consultation. We would be happy to make sure your questions are fully answered. To learn more about life after bankruptcy, check out the following articles.
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