What happens to your credit after you file Chapter 7 bankruptcy is not what you think. Most of our guests are completely shocked to find out that Chapter 7 bankruptcy does not have the negative repercussions on your credit you think. We know, there is a stigma associated with filing bankruptcy. Have you ever wondered why or who really benefits if there is a stigma associated with filing bankruptcy?
Answer: Creditors
Here's the real truth about what happens to your credit after bankruptcy and what the creditors don't want you to know...
We have all heard the myths right? You will never get credit again. If you file a Chapter 7 Bankruptcy your screwed. You'll never be able to buy a house, buy a car, or get any credit for anything. Your credit will be ruined forever... Don’t file a Chapter 7 Bankruptcy, they say! These types of horror stories are all over the internet and if you've been researching what happens after chapter 7 bankruptcy we're sure you've already found them! However, the truth is that if you file a Chapter 7 Bankruptcy you are NOT ruining your credit. In fact, the complete opposite is true. You are actually helping your credit by eliminating all of the debt you owe.
First, a Chapter 7 Bankruptcy is on your credit report for 10 years. That is a certainty, but after receiving your discharge, you are debt free! Most people we meet with already have poor credit or will have poor credit soon because they can’t afford to keep up on their payments. The point is that at this point you can only improve your credit. Getting rid of debt is always a positive on your credit report. Lenders don’t care if you pay other creditors (trust us), they care are you going to them!