Filing for bankruptcy in Wyoming is a significant financial undertaking, frequently raising the immediate question: “What will be the effect on my credit score?” While bankruptcy will undeniably influence one’s credit, it does not necessarily preclude future borrowing. For many, bankruptcy serves as the initial stride toward re-establishing a more robust financial future. Nevertheless, attempting to rebuild your credit prior to the finalization of your case may yield unfavorable consequences. Please continue reading as we delve into essential considerations regarding these issues and highlight the importance of connecting with our experienced Gillette Bankruptcy Lawyers.
What Happens to My Credit Score When I File for Bankruptcy?
When you file for bankruptcy in Wyoming, it will be reported to the major credit bureaus, and your credit score will plummet, making it difficult to obtain new credit for years. The extent of the damage and how long it remains on your report will depend on your financial situation before filing and the bankruptcy chapter filed. For those with higher scores, the hit can feel more severe. For instance, an individual with a good score may lose 200 points, while someone with an already low score may not experience a drastic decline.
Fortunately, bankruptcy will not be a permanent stain on your report. However, it will remain on your credit score for several years. For a Chapter 7 bankruptcy, you can expect it to stay on your report for up to ten years from the filing date. For Chapter 13 bankruptcy, you can anticipate it remaining on your report for up to seven years from the filing date. Chapter 13 has a shorter timeframe as it involves a repayment plan.
What Are the Risks of Rebuilding Credit Before a Bankruptcy Discharge?
When contemplating a bankruptcy in Wyoming, it’s crucial to understand the potential implications of certain actions before officially filing your case. A prevalent misconception is that proactively attempting to rebuild credit before filing is beneficial. However, this may be perceived as fraudulent activity by the courts.
Rather than trying to secure new lines of credit, making large purchases, or paying off specific creditors in an effort to improve your standing before declaring, it’s strongly advised to exercise caution. If the court finds that you have committed fraud, it can object to discharging your debt. The appropriate time to begin rebuilding your credit is after your debts have been discharged. This means you have to wait until bankruptcy proceedings have concluded and a court order is issued releasing you from your financial obligations.
As you can see, attempting to rebuild your credit before filing for bankruptcy can present significant complications and potentially jeopardize your discharge. For personalized advice and to ensure the best possible outcome for your unique circumstances, we recommend contacting 307 Bankruptcy today for a confidential consultation. Our legal team is here to guide you through every step of this complex process.
