How Filing Bankruptcy May Affect Your Credit Score in Minnesota - mhpllclaw
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How Filing Bankruptcy May Affect Your Credit Score in Minnesota

Plan to rebuild in a healthy financial state

Credit scores define our financial viability in the United States. They can affect our jobs, living situations, and many aspects of life. Many of our Twin Cities clients see their credit scores slipping prior to filing for bankruptcy because they are unable to pay their bills or must carry large balances from month to month. It is important to learn how bankruptcy will affect your credit score.

What a credit score is and why it matters

Your credit score is a compilation of financial records based on your credit card history, payment behavior, total balances and new lines of credit opened. Ranging from 300 to 850, creditors use your credit score to evaluate your trustworthiness with a line of their credit. To creditors, a lower score means higher risk in lending credit. If you have scores in the bad (550 and below) or poor (550-649) ranges, you will have higher interest rates and higher down payment requirements than someone with fair credit (650-699) and above. Moreover, you may receive shorter repayment windows and face more aggressive collection efforts if a payment is missed. Employers, landlords, cable and utility providers and insurance companies may review your credit when deciding whether to work with you.

Bankruptcy on your credit history

There is no way around it—having a bankruptcy on your credit history will cause your score to drop significantly, with the exact numbers dependent on your score prior to filing for bankruptcy in Minnesota. If your credit score was not very high to begin with, you will suffer less of an impact.

The good news is that since you are wiping out the bulk of your financial problems through bankruptcy, you are in a better position to rebuild your credit score. The record of your bankruptcy remains on your credit report for a number of years; Chapter 13 bankruptcy appears on your credit report for seven years, and Chapter 7 bankruptcy lingers for 7 years as well. But as long as you pay your bills and do not carry large balances from month to month, your credit score will improve and the bankruptcy’s impact will lessen over time.

Fixing your credit score in Minnesota

For years, we have been meeting with clients who are deeply concerned about the future: How will you survive in a world that will judge you based on your credit score? Because our clients are so concerned about their credit, we found the best credit education program available: 720CreditScore.com’s credit program (7 Steps to a 720 Credit Score). Our clients have transformed their credit scores, usually within 24 months of declaring bankruptcy. We offer this credit counseling program to every one of our bankruptcy clients for free. You can learn more from our blog post, Rebuilding Your Credit: An Important Next Step

Contact a Minnesota credit relief bankruptcy attorney today

Learn how to fix your finances and boost your credit score by calling Martin & Hedervare PLLC at (651) 383-4725 or contacting us online today. During your free in-office consultation, we will find the best route to financial freedom for you.

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