Bankruptcy will affect your credit score but if you go by the stats provided by the lawyers of the The Law Offices of Joseph G. Pleva as well as of Equifax credit bureau, you will see that your credit score will be better off and that too within a year or so. However, it is your actions after filing bankruptcy will determine how soon and how much it will rise. Nonetheless, there is no reason to believe bankruptcy is the end of everything. In fact, it is a tool that will provide you with chance to recover your financial as well as your battered credit health at quite a rapid rate.
Facts and findings
The facts and findings of bankruptcy do not prove that it is not all that bad. Chapter 7 bankruptcy is the most common one filed as compared to Chapter 13 bankruptcy. The average credit score for Chapter 7 discharge was found to be 620 within six months of it. On the other hand, the average credit score for Chapter 13 was usually between 535 and 610. This is because it requires following a three to five year repayment plan which most filers do not complete.
The FICO figures
According to the statistical figures of FICO, the official company that created credit score showed the median credit scores when people filed for any type of bankruptcy. You must know that most FICO scores range between 300 and 850. They said that the score hovers round 550 before filing and 560 after that but after a couple of years about 28% of filers had a score of 620 and more and after four years this number increased to 48% of filers. It even said that 1% of filers even had scores above 700. Therefore, completed bankruptcies can provide bigger credit gains.
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