If you are overwhelmed with debt, filing for bankruptcy may help bring some much needed relief. Bankruptcy can allow a borrower to restructure or discharge their debt and emerge from the bankruptcy with a fresh start. In many cases, bankruptcy will cause a credit score to increase. By discharging bad debts and getting a fresh start, you may see a significant increase in your credit score. For more information on how bankruptcy affects credit scores, contact a Tampa bankruptcy lawyer. There are many different types of bankruptcy filings, each with their own set of advantages and disadvantages. Therefore, if you are considering filing for bankruptcy you should first consult with a Tampa bankruptcy lawyer.
How Chapter 7 or Chapter 13 Bankruptcy Affects Credit Scores
Chapter 13 is considered a restructuring bankruptcy because the debtor continues to make payments to their creditors according to a court approved payment plan. Unlike Chapter 13 bankruptcy, Chapter 7 does not involve a payment plan. Instead of making monthly payments to creditors, the bankruptcy trustee will liquidate a debtor’s assets and use the proceeds of the sale to pay the creditors included in the bankruptcy. Fortunately, not all of a debtor’s assets will be subjected to liquidation by the bankruptcy trustee.
One important factor to consider before filing for bankruptcy is the impact it may have on your credit score. While it is difficult to predict with certainty how bankruptcy affects credit scores, an experienced bankruptcy attorney in Tampa can help to advise on which type of bankruptcy may be best for your specific situation.
How Bankruptcy Affects Credit Scores
It is difficult to say with certainty ho bankruptcy affects credit scores because credit scores are based on a multitude of factors. One of the factors that determines the credit score is the amount of amount debt a person has. Bankruptcy can assist with this factor by discharging debt a borrower may otherwise be obligated to pay. Another factor is open credit accounts with late payments, these accounts can significantly reduce your credit score. Fortunately, bankruptcy can assist with this aspect as well. If the account (credit card for example) is discharged in bankruptcy the account will be closed and should no longer be reported as an open delinquent account. For more information on how bankruptcy affects credit scores and how the score is calculated click here.
Tampa Bankruptcy Law Firm
At Florida Law Advisers, P.A., we understand that filing for bankruptcy can be a very confusing and intimidating process. That is why we work so hard to make the process as easy as possible for our clients. When you hire Florida Law Advisers, P.A., you have an experienced Tampa bankruptcy attorney by your side throughout every phase of the bankruptcy process. We will help ensure your rights are protected, keep you well-informed, and help you receive the utmost relief bankruptcy can offer. To schedule a free consultation with a Tampa bankruptcy attorney at our firm call us today at 800 990 7763.