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  • Bankruptcy’s Impact on Credit Worthiness

    Bankruptcy’s Impact on Credit Worthiness

    Credit scores reflect on the financial history of an individual or a business and are meticulously built over time. When there are moments of financial crisis and debts pile up, the individuals ultimately opt to file for bankruptcy. The biggest fear when the individual’s file for bankruptcy is how it impacts their credit scores. There are many reasons why credit scores will not be impacted in cases of bankruptcy as every individual commences their financial status afresh and they have time to rebuild their credit history

    Checking with a bankruptcy attorney or a law firm such as Recovery Law Group, who serve the Los Angeles and Dallas regions, is a recommended option for individuals who seek guidance on building their credit history. They have the experience to share the best practices and impart the guidance in order to avoid any further mishaps in the financial arena of the individuals. The below points will also be a guideline to understand how your credit worthiness stands when you have filed for bankruptcy.

    • If an individual has filed for Chapter 7 bankruptcy, the filing will remain on their credit report for up to 10 years of tenure. If good efforts are expended on rebuilding the credit over time, then the filing & the discharged debts have very less impact. It is assessed that most of the discharged debts drop off a credit report in approximately 7 years.
    • If the bankruptcy filing is of Chapter 13 type, then it is displayed on the consumer’s credit report for seven years. It is the similar condition for discharged debts too even though they may be repaid within three to five years through a formalized repayment plan – discharged debts appear on the credit report even beyond the repayment tenure.

    Credit worthiness will eventually improve as the time goes by – the impact of repayment and your rebuilding of credit worthiness will enable you to get offers from the creditors at large. So besides the amount of time that the bankruptcy filing remains on the credit report, the impact of the filing may reflect in high-interest rates (direct/ hidden) of new credit offers or may put individuals to deal with subprime lenders. Some of the mortgage lenders will view bankruptcy filing differently – say the eligibility of an individual to obtain an FHA mortgage can be one year if filed for Chapter 13 bankruptcy and will be two years if Chapter 7 filing is done. Few factors such as income, current debts, and down payment amount work beyond the bankruptcy filing and may affect the wait periods.

    It is understood that individuals leverage bankruptcy filing to regain their financial stability. Though the impact to credit worthiness is there when you have filed for bankruptcy, it isn’t permanent!


      *Are you more than 60 days past due on your mortgage?

      *Do you own a home?

      Are you currently working?

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    • A Joint Chapter 7 Bankruptcy Filing

      A Joint Chapter 7 Bankruptcy Filing

      Joint Bankruptcy or Joint Chapter 7 Bankruptcy is the filing opted by married couples who face surplus debts and seek options to have them discharged as they have challenges of paying them. Let’s first understand how the filing of Joint Bankruptcy works –

      • A single set of bankruptcy papers are filed on behalf of the married couple (though there are two individuals involved)
      • All property information, debts, income to the family and expenses are submitted to the court
      • Debts can be those that are jointly owned or can be the ones that an individual owes to other
      • Details of the debts that are expected to be discharged have to be provided in the petition – debts that can be allowed to be discharged as per Chapter 7 are considered in the joint petition
      • For discharging of debts, the assets are usually cannibalized – it is normally not possible to protect every asset. Hence it is important to understand the risks involved in jointly filing for bankruptcy especially when you own properties with your spouse
      • If the joint petitioners are from the Texas region, they can review the Federal and State Bankruptcy exemptions in order to protect their properties against liquidation in cases of filing a bankruptcy. One motor vehicle per licensed family member, 100-200 acres of property in the country or 10 acres in a city are some of the state level exemptions in Texas. Reviewing these with the bank attorney prior to filing the joint petition is a wise move

      Now that we know how the filing process works, let’s also assess the advantages to opting for a joint bankruptcy filing.

      • As filing for bankruptcy is an expensive ordeal, do it jointly is definitely going to cost you less. It will save couples from paying double the filing fees and paying your attorney twice the amount
      • Most of the dischargeable debts are appropriately taken care of and eliminated in the joint bankruptcy filing
      • The efficiency of completing the bankruptcy case is better when filed jointly – you save time by handling all of the tasks at a single phase/ time

      However, there are some disadvantages to this process –

      • All of the assets that are individually owned or jointly owned are disclosed during the filing procedure. This can also end up in liquidating valuable or viable properties by the trustee handling your case – at times the partner who owns more properties end up losing more of it
      • The couple ends up in owing too much of priority debt. As per the clauses of Chapter 7, there are certain kinds of debts that cannot be discharged – taxes, mortgages and child support are some of this kind. In cases of these, the repayment in full of these debts also needs to be done jointly as per Chapter 13. In such situations, the partner who owes the debt can file the bankruptcy individually

      Are you perplexed of whether to opt for a joint fling or not? A renowned law firm and the experienced attorneys will help determine your case and advise the course of action as needed. Seeking the assistance of such firms like the Recovery Law Group can put you in better positions of handling your bankruptcy scenario and also retain some of your prized assets by saving them from liquidation.


        *Are you more than 60 days past due on your mortgage?

        *Do you own a home?

        Are you currently working?

        By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

      • Why Hold Back from Bankruptcy Filing?

        Why Hold Back from Bankruptcy Filing?

        Many times, people who owe creditors money, lead a life that is full of threats and harassment. Debt collection agencies do not leave any stone unturned to get back the money that you owe them or the creditors. In case you too are plagued with incessant phone calls, urgent notices or demands for financial settlements, why are you hesitating to file for bankruptcy? More often than not people are afraid of filing for bankruptcy due to the various myths surrounding it. Lawyers of Sacramento based law firm Recovery Law Group provide a number of common reasons why people restrain themselves from filing for bankruptcy:

        • Bankruptcy Hurts You Financially: Credit card companies allow you to make purchases now and pay the money later while charging heavy interest on the amount of transaction. Since you are paying for a long period of time, the loans never get paid off while you keep on increasing your debt by continuous usage of credit cards. In the long run, this causes you to have poor credit, which can be eliminated by filing for bankruptcy. With the bankruptcy filing, you can get your old debts discharged (completely or partly) and start fresh. In this manner, you can rebuild your credit score in a couple of years compared to struggling with bills for a long time.

        • Your Credit Gets Ruined for a Decade: It won’t be incorrect to say that getting loan or credit card becomes slightly difficult after bankruptcy, but getting one with poor credit score is highly unlikely too. It is important to note that filing for bankruptcy provides you with a chance of getting a fresh slate to start anew. When you make regular and timely payments on your mortgages, utilities, rents and any other debts, your credit ratings will improve. This will ultimately get you approval for secure credit cards and loans within a couple of years of filing for personal bankruptcy

        • Lose Your Home by Filing for Bankruptcy: Though there are chances in case of personal bankruptcy (Chapter 7) where personal assets including property are sold off to clear the creditors’ dues, however, the possibility of this happening is slim. This is because of strong federal exemptions. Moreover, if you are eligible and file for bankruptcy under Chapter 13, you won’t be losing your home at all.


          *Are you more than 60 days past due on your mortgage?

          *Do you own a home?

          Are you currently working?

          By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

        • Implications of Filing for Divorce during Chapter 7 Bankruptcy?

          Implications of Filing for Divorce during Chapter 7 Bankruptcy?

          Financial stress and heavy debt can cause many problems in your life, including rocking your shaky relationship. It is therefore not uncommon to find that people who are in the process of bankruptcy also have marital discord resulting in divorce. Since married couples often have their finances entangled and their financial responsibilities complicated, a sign of financial trouble may cause a rift in many marriages. No matter what the reason behind marital discord and divorce, there are some points to consider when a bankruptcy filing and divorce are taking place simultaneously. (more…)

        • How Long Do I Have to Wait To File For Bankruptcy Again?

          How Long Do I Have to Wait To File For Bankruptcy Again?

          One of the most powerful legal tools to ward of bad financial situation is bankruptcy. While filing for bankruptcy, you can get rid of huge amounts of debts thereby overcoming financial distress. However, one of the most popular misconception that people have is that if they have filed for bankruptcy once, they cannot file again. Well, lawyers of Sacramento based law firm Recovery Law Group, say that nothing could be further from the truth! (more…)

        • Chapter 7 Bankruptcy: Can You Keep Your Car under Motor Vehicle Exemption?

          Chapter 7 Bankruptcy: Can You Keep Your Car under Motor Vehicle Exemption?

          Unlike popular belief, you do not lose all your possessions when you file for bankruptcy under chapter 7. Thanks to exemption laws, you can protect property including an unassuming vehicle (car, truck, motorcycle or van). Thanks to your state’s motor vehicle exemption you can protect a certain amount of equity in a car. If you completely own your vehicle (i.e. have cleared all vehicle payment dues or are up-to-date on them) you can take measures to avoid the lenders repossessing your car. In case you lag on your car payments you will have to come up with a plan to bring your payments current before filing for bankruptcy, if you want to have a chance to keep your car. (more…)

        • Worried About Bankruptcy? Here’s an Overview of Exemptions Granted during Bankruptcy

          Worried About Bankruptcy? Here’s an Overview of Exemptions Granted during Bankruptcy

          What if an investment you thought was your ticket to millions causes your downfall? Unable to pay your debts, many people and/or companies file for bankruptcy which offers them a lifeline. Your assets and liabilities are assessed by court trustees and judges to conclude whether your debts could be discharged. However, there are some bankruptcy exemptions too, which are used to determine how much property you can keep.

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        • Not Sure If You Should File Chapter 7 Or 13? Know The Difference Between Two, First

          Not Sure If You Should File Chapter 7 Or 13? Know The Difference Between Two, First

          Confused about what you should file, Chapter 7 or Chapter 13? Based on your current circumstances, you may find one choice outdoes the other. Chapter 7 and Chapter 13 are no same, and carrying different potential consequences. Both, however, can help defaulters make a suitable move toward debt repayment.

          Chapter 7 bankruptcy San Antonio, otherwise known as liquidation, is a legal choice that helps people discharge their debts. This also means having to capitulate some of your valuable assets, such as cars, additional properties or even cash, sometimes. (more…)

        • Here’s How We Can Help You With Chapter 7 And Chapter 13 Issues

          Here’s How We Can Help You With Chapter 7 And Chapter 13 Issues

          Bankruptcy has been a serious concern since forever, however many homeowners, families and individuals throughout the U.S. consider it the right choice. To understand bankruptcy protection or liquidation process does require an experienced and comprehensively knowledgeable legal professional, who further will guide you through its system. Recovery Law Group is committed to guiding you as you prepare for bankruptcy and protection. (more…)