When people fall behind on payments and become overwhelmed by debt, they can seek relief through bankruptcy. The decision to file for bankruptcy can be tough, but in many circumstances, bankruptcy is the greatest way to get a fresh start financially. A Bankruptcy attorney Covina is the best man to handle.
When filing for bankruptcy, you have the option of filing under one of several “chapters.” A Bankruptcy attorney Covina at chapter 13, permits debtors to make manageable payments over a certain period of time in exchange for the majority of their debts being discharged.
Repayment programs under Chapter 13 usually last three to five years. If you have filed for Chapter 13 bankruptcy or are considering doing so soon, you may be asking what you can do to restore your credit score during this time.
The expert Bankruptcy attorney Covina can answer any questions you have about whether Chapter 13 will harm your credit and how to improve your credit score while in Chapter 13.
How Long Will Bankruptcy Show Up On Your Credit Report?
When people realize that bankruptcy might stay on their credit reports for up to ten years, they are hesitant to file. You should be aware, however, that this 10-year rule only applies to Chapter 7 bankruptcy proceedings.
So, how long does it take for a Chapter 13 bankruptcy to be removed from your credit report? When you file for Chapter 13, your bankruptcy will only appear on your credit report for seven years. If you have a five-year repayment plan, for example, the bankruptcy will only last five years.
If you have a five-year repayment plan, for example, the bankruptcy will only be listed on your credit report for two years after you have completed it.
Is It Possible to Pay Off a Chapter 13 Bankruptcy Earlier?
You can pay ahead or even pay off a Chapter 13 plan at any time, but this may not necessarily result in an immediate discharge and may result in the trustee or the holder of an unsecured claim seeking an unfavorable plan change. This is something you should explore with your lawyer so you can weigh the risks and rewards.
Rebuilding Your Credit in Chapter 13: Best Practices
While you are unemployed, here are some things you may take to start restoring your credit.
While you’re finishing a Chapter 13 bankruptcy plan, here are some steps you may take to start restoring your credit: Get help from a Bankruptcy Attorney in Covina.
To establish a regular payment history, apply for a “credit builder” card or loan.
Request that a relative or close friend add your name to their old credit card.
Co-sign any debts you take out with a family member or close friend.
Is It Possible to Get Consumer Debt Relief While in Chapter 13?
Yes. During a chapter 13 case, credit cards, vehicle loans, and even residential mortgage loans can be obtained. The mortgage loan is the most difficult of the loans, but it is doable when a bankruptcy case has been ongoing for some time.
Contact the bankruptcy specialists if you have questions regarding Chapter 13 bankruptcy or how to rehabilitate your credit. During your free initial session, we can address your issues and offer candid recommendations.