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Minimize impact to credit score in Chapter 13 bankruptcy

Far from being a stigma, filing for bankruptcy is an opportunity to make things right. By declaring Chapter 13, Chapter 7 or another form of bankruptcy, Florida debtors are able to restructure their financial obligations with an eye set firmly on the future. That is, they are able to move forward and eventually emerge from the bankruptcy process with no debt to burden them.

One thing that holds many people back in Florida and elsewhere is a concern about their credit report. After all, the impact to one's credit score can last for many years after the Chapter 13 bankruptcy process has ended. Nonetheless, there are steps that a person can take after filing for bankruptcy to keep their credit score in relatively good standing.

First, of course, is just regularly reviewing one's credit report. It is possible to request one free copy per year, and this can help with not only keeping track of debt but also with ensuring no errors creep into the report. Paying bills on time and knowing your own limits are two other common-sense measures that are easy to take.

Less known, however, may be that it is not necessarily a good idea to close a credit account. Part of a credit score is based on how much credit is available to you, and so closing a credit account could be detrimental. It may well be more beneficial to simply tear up the credit card without closing the account.

Overall, though, by simply exercising due diligence in attending to one's credit score, it may be possible to work through a Chapter 13 or Chapter 7 bankruptcy while keeping the impact to a bare minimum.

Source: MSN Money, "7 credit tips for after bankruptcy," Britt Klontz, April 12, 2012

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Norman L. Schroeder, II, P.A.

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