Understanding Bankruptcy
And Your Credit

Life's financial curveballs can sideline you from paying bills or meeting your other financial needs. When thinking about the next steps for your financial future, it's easy to fall victim to information that may mean well but isn't accurate. If you think bankruptcy is the right step for you, it’s important that you understand how to navigate the bankruptcy process and what you need to do to protect yourself.

If you are considering filing for bankruptcy and wish to understand the long-term effect that bankruptcy can have on your credit score, it is crucial that you consult with a knowledgeable California bankruptcy attorney for proper guidance.

Common Myths About the Bankruptcy Process

If you are struggling with debt, you may wish to avoid bankruptcy for fear of the damage it could do to your credit. However, contrary to popular belief, carrying large balances for long periods of time indicates to potential creditors that you are a risky investment. Even if you pay your minimum payments, the effects of long-term debt can often do far more damage than filing bankruptcy.

If you have questions about how bankruptcy could affect your credit, our attorneys at The Winter Law Group are available to provide the guidance you need. As experienced California bankruptcy attorneys, we will help you understand the relationship between bankruptcy and your credit so that you can make informed decisions that will help you work towards achieving sustainable debt relief.

Our team will evaluate your unique situation and determine your possible options to get relief and rebuild your credit. We proudly represent people in Fresno, California, and throughout the Central Valley through the bankruptcy process, including life after bankruptcy.

What Is My Credit Score?

Your credit score is the number that creditors use to evaluate your potential risk. With a lower credit score, you may receive a higher interest rate as opposed to someone with a higher score. In general, creditors more often use credit scores to set interest rates and spending limits. Bankruptcy is only one of many factors credit reporting agencies use to calculate your score.

How Bankruptcy Affects
Your Credit Score

Filing for bankruptcy is a major decision that can impact your life in a variety of ways. Choosing to file can help solidify your finances in a number of ways, but it can also impact your credit score in the following ways:

Payment History

This is the most important factor used to determine your credit score. When you file for bankruptcy, you won't be paying covered debts in full as initially agreed. Future lenders may reject your application due to this payment history.

A Decrease in Credit Score

Depending on the type of bankruptcy you file, your credit score will decrease anywhere from 160 to 220 points. Depending on your current credit score, such a decrease can turn a good credit rating into a poor one.

The Lasting Impact on Your Report

Filing for Chapter 7 bankruptcy will remain on your credit report for ten years, and filing for Chapter 13 bankruptcy will stay on your report for seven years. Lenders will be able to see this on your credit reports in the public records section.

Qualifying for Future Loans

Filing for bankruptcy will likely make it more difficult to qualify for a home loan, auto loan, or credit cards, due to your fair or poor credit report.

While it is true that filing may lower your credit score, you can begin re-establishing your credit-worthiness almost immediately after your bankruptcy successfully closes.

Outside of bankruptcy, you may be aware that your credit does not improve with each debt you pay off. Only when the last debt that you owe is paid off will your credit begin to recover. However, bankruptcy discharges all debts at one time. From that moment on, you can begin to rebuild your credit to gain financial stability and improve your credit score after bankruptcy.

How to Qualify for
Credit After You File

Rebuilding your credit may take some time. By managing your finances responsibly, however, you can re-establish your credit-worthiness in a fairly short amount of time. Many people who have gone through the process of bankruptcy have gone on to buy cars, homes, and obtain a good line of credit through patience and hard work. Our bankruptcy attorney can help you set realistic financial goals and take the necessary steps to start building toward a more stable financial future.

Fortunately, your credit score is only one of the factors that companies use to decide if they will give you a loan to buy what you need. The credit scoring models favor new information or recent credit history over old information. Likewise, the amount of other debt and your income levels are often more important than the raw score. Therefore, you can improve your credit scores by managing new credit responsibly after bankruptcy. 

How the Winter
Law Group Can Help

According to data compiled by Statista, between July 1, 2019, and June 30, 2020, there were 59,056 non-business bankruptcy filings in California, making it the highest amongst all U.S. states. Many of these individuals didn't go through it alone, and neither should you. If you are considering filing bankruptcy, consulting with a knowledgeable and experienced California bankruptcy attorney is a crucial step toward achieving financial stability.

At the Winter Law Group, we are dedicated to providing outstanding legal services and comprehensive representation to clients in bankruptcy-related matters. Our firm can:

  • Review your case and help you understand your possible options
  • Evaluate your unique situation and determine which bankruptcy option is right for you
  • Determine whether you are eligible for Chapter 7 or Chapter 13 bankruptcy
  • Help you file your forms and guide you through the entire bankruptcy process
  • Handle creditor harassments and negotiate with creditors to set up a feasible arrangement
  • Create strategies to help you manage and improve your credit score after bankruptcy

Contact the Winter Law Group today to schedule a free one-on-one consultation with an experienced California bankruptcy attorney. Our dedicated attorneys can offer you the comprehensive legal guidance and advocacy you need to navigate key decisions in your bankruptcy proceedings. We are also proud to serve clients throughout Fresno, Visalia, Clovis, Madera, Merced, Madera County, and Merced County, California.


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