Will a credit score go up immediately after a chapter 7 bankruptcy?

Your credit score may rise, but shouldn't be the impetus behind your bankruptcy filing. If it does go up, it'll likely be marginal, and will take a few years to really improve. The fact that the balances will effectively be "removed" will have a positive impact, but your credit report will also contain a BK which is clearly a negative. Regardless, if you need to file, you need to file, and credit score, as I mentioned above, shouldn't be the deciding factor.

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RE :Will a credit score go up immediately after a chapter 7 bankruptcy?

I have about 20-25 collection accounts most with balances exceeding the original limit, as well as, a tax lien that has been paid in full one year ago. I have 3 positive accounts, 2 student loans and one auto loan each paid in full on time every month. My credit scores are between 430-500 between the three credit bureaus. I heard that a bankruptcy can drop a person's score by 100 to 200 points. My question is since I will be filing a chapter 7 and reaffirming my positive debts and all the collection accounts making my score go down will be wiped clean. Will my score go up immediately after the discharge? Even though I will have a bankruptcy on my credit. I have heard this but not for sure how much truth there is to it. Any opinions will be appreciated.

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You can't do anything until your bankruptcy is discharged. Once the court has settled everything and you have a discharge date you can begin to rebuild your credit. One way to do it is to obtain a secured credit card and then make purchases and payments when they're due. Eventually, after a few months, the credit card company will increase your credit line. But let me stress this, you cannot have any derogatory items in your credit report after the bankruptcy. You may qualify for some types of home loans if you have never owned a home. Check with a reputable realtor for advice. Most of the time the mortgage companies want to wait a minimum of two years after discharge to give you a loan. Just remember, there will be a lot of lenders wanting to sell you cars, etc. after your bankruptcy. If you buy a car or other expensive item be sure to make on-time payments. Also be ready to provide a plausible reason to a mortgage company as to the cause of your bankruptcy. Good luck.

Filing for bankruptcy does not remove the collection accounts from your credit report. Collection accounts can stay on your credit report for 7 years -- even if you no longer owe the money.

Will a credit score go up immediately after a chapter 7 bankruptcy?

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