Will Filing Bankruptcy in Creek County Ruin My Credit?

Filing bankruptcy in Creek County doesn’t have to be so hard. One of the first questions any potential bankruptcy filer asks, and understandably so, is about the effect of bankruptcy on their credit. The focus is on what bankruptcy does to someone’s credit score and how long it appears on their credit report. Although your credit score may drop for a time, and bankruptcy will continue to appear on your credit report for a specific length of time, the effects are far from ruinous for your credit.

How Long Will Bankruptcy Stay On My Credit Report?

The length of time that bankruptcy remains on your credit report depends on the type of bankruptcy you filed. Specifically, it depends on the chapter of the Bankruptcy Code under which you filed your case. Most individuals or consumers file a bankruptcy in Oklahoma under Chapter 7 or Chapter 13.  You cannot remove a bankruptcy from your credit report. It will be removed automatically after seven or ten years, depending on the type of bankruptcy you filed.

Chapter 7 Bankruptcy

A Chapter 7 bankruptcy can stay on your credit report for up to 10 years from when the bankruptcy was filed. A Chapter 7 bankruptcy case involves liquidating your property to pay your creditors. However, this is, in truth, not always the case. Using property exemptions, most people who file Chapter 7 lose nothing and discharge most, if not all, of their debts. The property exemptions in Oklahoma allow you to keep your home, car and many other personal belongings.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy stays on your credit report for only seven years from the filing date of your bankruptcy case. While Chapter 7 is a liquidation or sale of your assets to get a fresh start, Chapter 13 is a reorganization of your assets and debts that involves a repayment plan that pays off some percentage of your debt over a time frame of not less than three years or no more than five years. 

How Filing Bankruptcy in Creek County Works

A Chapter 7 bankruptcy case, which may be filed by natural persons or artificial entities such as a corporation or LLC, typically takes four to five months to receive a discharge. A Chapter 13 bankruptcy case requires you to pay some portion of your disposable income to your creditors for at least three years but no more than five. You receive a discharge in a Chapter 13 case years after you file, whereas you typically receive a Chapter 7 discharge months after you file it. Despite this additional time before you receive a Chapter 13 discharge, filing a Chapter 13 has benefits that filing a Chapter 7 does not offer. Only natural persons may file Chapter 13 bankruptcy cases.

Chapter 7 Is Rapid

It may take you as little as four months to receive a discharge in a Chapter 7 bankruptcy case. Once it is established how much of your property is available for sale or liquidation, the bankruptcy trustee will issue a finding that indicates whether your bankruptcy is an “asset” or “no asset” case. If you could use all the property exemptions available so that you do not have any non-exempt assets, your matter will be a “no-asset” case, and you will not lose any real or personal property in your bankruptcy case.   

The Aftermath Of Filing Bankruptcy

You will be surprised how many new offers of credit you receive within months, or even weeks, of receiving your bankruptcy discharge. The interest rates and credit limits in these offers may not be the most desirable, but you should probably ignore these offers anyway. However, some of these offers will be for a secured credit card where you make a deposit and start with a very low credit limit of only a few hundred dollars. A secured credit card is an excellent way to restart building your credit. Provided that you make the payments on time each month, you will positively affect your credit history. Eventually, you will get other, better credit offers.

Bankruptcy Does NOT Ruin Your Credit

While a bankruptcy case filing will generally remain on your credit report for seven to ten years, filing bankruptcy will not forever ruin your credit. There are ways to rebuild your credit after receiving your discharge quickly. Regularly checking your credit report and keeping a low credit utilization rate are two ways to ensure that your credit score rises rather than falls.

Creek County Okla. Bankruptcy Lawyers

Filing bankruptcy in Creek County may not be as hard as you think. If you are experiencing stress because of financial problems, bankruptcy may be a better solution than you think it is. There are many myths about bankruptcy. One myth is that it will forever ruin your credit. This simply is not true. Bankruptcy can help you get a fresh start and restore your credit sooner than you think. The Creek County attorneys at Kania Law Office are experienced and knowledgeable in bankruptcy cases. For more information about how our Oklahoma lawyers can help you call (918) 209-3709  or contact us online.