Bankruptcy can be a legal process that allows people to get relief from debt and falls behind on their payments. Although it can be difficult to decide whether to file for bankruptcy, bankruptcy is often the best option to get a fresh start financially.
You can file bankruptcy proceedings under many different “chapters.” In exchange for most of your debt being wiped out, a Chapter 13 bankruptcy allows you to make reasonable payments over a set period.
Chapter 13 repayment plans usually last between three and five years. You may have already filed for Chapter 13 bankruptcy and are considering filing soon. If so, you might be curious about what you can do to rebuild your credit score during this time. Bruner Wright P.A. can answer any questions you may have about Chapter 13 and how it affects your credit.
What Length of Time Does Bankruptcy Stay On Your Credit Report?
When they find out that bankruptcy can stay on their credit report for up to 10 years, many people hesitate to file for bankruptcy. This 10-year rule is only applicable to Chapter 7 bankruptcy cases.
When Does a Chapter 13 Bankruptcy Go Off Your Credit Report?
Bankruptcy filings under Chapter 13 are removed from your credit reports for up to seven years after they are filed. If you have a 5-year repayment plan, your bankruptcy will be removed from your credit report after the plan is completed.
Can You Pay off a Chapter 13 Bankruptcy Early?
Although you can pay ahead of time or pay off a Chapter 13 plan at any time, it may not result in an immediate discharge. It could also result in the trustee seeking to modify the plan or the holder for an unsecured claim. Discuss this matter with your attorney to determine the benefits and risks.
Best Practices to Rebuild Your Credit During Chapter 13
These are steps that you can take to rebuild your credit while you’re going through a Chapter 13 bankruptcy. These include:
- To establish a consistent payment history, open a “credit builder card” or loan
- Ask a close friend or family member to add you to their credit card.
- Ask a close friend or family member to sign any loans you take out
- Check your credit report and dispute any inaccuracies
Is It Possible to Qualify for Consumer Debt While in a Chapter 13 Pending?
Yes. You can get credit cards, vehicle loans, or residential mortgage loans during chapter 13. Although the mortgage loan is the most difficult, it can be obtained after a bankruptcy case has been in limbo for some time.
Contact the bankruptcy specialists at Bruner Wright P.A., if you have any questions about Chapter 13 bankruptcy filings or rebuilding bad credit. During your initial consultation, we can answer your questions and offer straightforward advice. To learn more, contact us now!.
This post was written by Trey Wright, one of the best bankruptcy lawyers in Tallahassee! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.
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