When you are considering filing either Chapter 7 or 13 bankruptcy on behalf of your business, you might be frightened for many things. You might have fears that you will lose your business or that you won’t be able to pay for many aspects in the future. You might be concerned that you will lose more than just your business. With so many huge problems to focus on, you might not have even thought about how bankruptcy can affect your credit score. It is important to remember that, if you file for bankruptcy for your business, it will stay on your credit report for up to ten years. There are some aspects that you should know before you make this very important, life-changing decision.
The Impact of Bankruptcy on Your Score
When it comes to bankruptcy, the process does not discriminate. No matter if you are filing for Chapter 7 or 13, they will both have about the same impact on your credit score. If you are planning on filing for bankruptcy but there are issues in your life where your credit score is important, such as buying a home or getting a loan for a vehicle, you might find that this impact on your score could hold you back and make these things even more difficult.
In 2010, FICO released a report that showed that bankruptcy can lower your credit score by quite a bit, which might leave you feeling a bit concerned. For example, they said that somebody who had a credit score of 780, which is considered to be a high score, they could lose up to 240 points if they decide to file for bankruptcy. For some with a score of 680, it could drop about 150 points. As you can see, if you have a high credit score, there might be some things for you to worry about, because bankruptcy could cost you a lot.
Many people wonder how they will revive their credit if they decide that bankruptcy is their best option after trying to exhaust so many other options. These steps might be time-consuming such as spending the time to revive your payment history by always making payments on time, or opening new accounts that you know you will be able to handle.
The main factors that determine what your credit score will look like in the future after you have chosen bankruptcy for your business is the length of time that the bankruptcy has been on your report and the presence of filing in the first place. If there are no other options to exhaust, bankruptcy might actually be the most positive choice for your business, whether you are throwing in the towel or restructuring your business and getting back on track. It is important to be prepared for what bankruptcy can do to your score, but you should know that this isn’t the end for your score and that there is hope.
How We Can Help
At M.J. Watson & Associates, our skilled bankruptcy attorneys are ready to speak with you about the process of bankruptcy and the impact it can have on your overall financial future. Whether you choose to go through the process of Chapter 7 bankruptcy or Chapter 11, we can assist you as we are skilled in these types of bankruptcy choices and are willing to answer all of your questions before you move forward. Contact us to find out what we can do for you to ease the process for you at 817-877-2861.