Many individuals may have been in tough financial situations that left them contemplating their debt relief options. South Carolina residents with substantial debt may have wondered whether Chapter 7 bankruptcy could be right for them, but they may also fear that taking such a route could negatively affect their credit scores. However, discharging debt through bankruptcy could potentially help increase scores.
A recent report indicated that many individuals who file for bankruptcy face a considerable decline in their credit scores in the 18 months prior to filing. During this time, the average credit score landed at approximately 538 on a 280 to 850 credit score scale. After going through Chapter 7 and discharging debt, the average score increased to about 620. The bankruptcy will remain on record for 10 years, but it necessarily does not have to negatively affect individuals.
After filing, parties do have options for continuing to improve their scores. Secured and unsecured credit cards that are used responsibly could help parties rebuild credit over time. Secured credit cards may be favorable for individuals who are worried about their credit as the cards are issued only after a deposit of $200 to $2,000 has been made to the issuing bank.
Filing for bankruptcy could certainly seem intimidating, especially for individuals who may not have all the information. Therefore, South Carolina residents who are considering their debt management routes may wish to find out more information about Chapter 7 bankruptcy. Speaking with experienced attorneys could allow interested individuals to gain reliable knowledge as well as guidance for their own particular cases.
Source: inforum.com, “Filing for bankruptcy may actually help credit scores”, Liz Weston, Nov. 8, 2016