Law Offices of David G. Arganian, Seattle, WA

Rebuilding Credit After a Bankruptcy Filing in Denver

If you have recently filed for bankruptcy or are considering filing for bankruptcy in Colorado, a question that we are often asked is "What can we do to rebuild our credit after a bankruptcy?"

Clients are often concerned about what will happen to their credit after filing for bankruptcy in Denver. Though it is true that a bankruptcy can remain on credit reports for up to 10 years, it does not mean that immediate and effective action cannot be taken right away to begin rebuilding credit scores.

The first thing to realize is that offers to receive credit cards may decline initially following a Chapter 7 or a Chapter 13 bankruptcy filing, if there are other loans that the debtor has, say a car loan or a home loan, when these are getting paid on time consistently, this will begin to raise credit scores. Another important factor to remember is that part of a credit score is a ratio between income and debt. If the income stays the same and the debt goes away, this makes the client more likely to be able to repay their loans than they would have been prior to a filing.

If you think of your credit score to be a reflection of the statistical probability of you repaying the loan you are to receive, a post bankruptcy client is often a better financial risk for a lender than a client who is completely leveraged and who is one unfortunate event from needing to file for bankruptcy.

Bankruptcy does affect credit scores, to be sure, but with sound financial habits and hard work, we have seen our clients raise their credit scores over 100 points even after filing for bankruptcy!

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