There is no definite and certain answer to the often-asked question, “what happens to my credit score if I file bankruptcy?” But there are many factors that you can use to gauge and pretty accurately assess where you can expect your credit score to be after bankruptcy.
To begin with, where your credit will be after bankruptcy is largely dependent upon where your credit score is before bankruptcy. If you have an 820 credit score before bankruptcy, you may find that you have a 700 credit score right after bankruptcy. That’s a whopping 120 point drop in your credit score, but it is still a relatively high credit score compared to most consumers. By contrast if you have a 480 credit score before bankruptcy, you may find you have a 600 credit score shortly after bankruptcy. That’s a dramatic, 120 point increase, but it is still not a very high credit score.
As an experienced bankruptcy lawyer who has handled hundreds of bankruptcy cases, I can tell you that the great majority of my clients have a credit score in the 600 range within about one and one-half years after filing bankruptcy. In fact, before I file bankruptcy for a client, my firm pulls a credit report with a projected 15-month post-bankruptcy credit score. Most clients have a projected 15-month post-bankruptcy credit score in the very high 500s or the low 600s.
Also, in my experience, most of my clients begin to gradually increase their credit scores from the low 600s to the mid 600s and up to 700 within 4-5 years after filing bankruptcy. I have personally witnessed many of my San Diego bankruptcy clients having a credit score of 700 or more within 3-5 years after filing for bankruptcy relief.
In a nutshell, after bankruptcy you are basically beginning a new financial life with a clean slate and a clean record. It is similar to turning 18 and getting your very first credit cards and starting to rebuild credit. The more credit lines you obtain and the better you manage them, the faster your credit score will rise. If you have a car loan before bankruptcy and reaffirm the debt after bankruptcy, the car loan will help you increase your credit score more rapidly than a bankruptcy filer that has no car loan, just like a car loan would help an 18-year old build credit faster than another 18-year old with no car loan.
So if you are wondering what will happen to your credit score if you file bankruptcy, while there is not certain answer or exact number you are guaranteed to receive, you hopefully now have an idea of the range of a credit score you can expect to see in the years after your bankruptcy filing. Depending upon where you credit score is now, that may or may not be a welcome score. Each individual will have to decide for himself or herself and a bankruptcy lawyer can definitely help you get a clearer picture on the road that lies ahead.