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Your Credit Rating after a Negative Event

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Bankruptcy Attorney serving Cocoa Beach, Florida

One of the main concerns people have when they are facing bankruptcy or another negative financial event is whether or not they will ever be able to own a home again. You may have heard that it is not possible to buy a home after you have experienced an adverse financial event, such as a foreclosure or bankruptcy, but this typically is not true. Before you give up hope consider the following:

  • It takes time. You may not be eligible to qualify for a mortgage immediately, but give it time. For example, if you completed a Chapter 13 bankruptcy and you have good credit afterward, you may be able to get a home loan after one year. However, after a foreclosure, you will need to wait seven years before you qualify for a conventional loan that can be sold to Fannie Mae or Freddie Mac. There are also several time frames between these two. The point is, don’t assume that filing for bankruptcy will prevent you from every owning a home again. It will take time and hard work, but you might be surprised at how quickly you can qualify for a mortgage again.
  • Work on your credit score. After a bankruptcy, foreclosure or short sale, it is important that you work on improving your credit score. This means making payments on time and showing financial responsibility. Additionally, you should review your credit report on a regular basis to ensure it is correct. If you discover any errors, you should immediately have them corrected.
  • Plan ahead. It is essential to understand what the consequences are of filing for bankruptcy protection or foreclosure or short sale of your home. A seasoned attorney can help you understand what to expect and to assist you in obtaining the necessary financing when you are ready to buy a new home.

If you have questions regarding how a foreclosure, bankruptcy or short sale will impact your ability to buy a new home in the future, contact Faro & Crowder today.

Don’t delay any longer. Call us today to schedule your initial consultation. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.


Chapter 7, Chapter 13 & Your Credit Report

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You are probably aware that the primary downside to filing for bankruptcy protection is that it negatively impacts your credit score. However, how long your bankruptcy remains on your credit report depends on whether you file a Chapter 7 or Chapter 13 case.

Chapter 7

When you file a Chapter 7, the bankruptcy notation remains on your credit report for ten years from the date your petition was filed. Although this seems like a long time for it to impact your credit score, it is often a minor consequence when compared to the quick, comprehensive relief from your debt that a Chapter 7 case provides. A typical Chapter 7 case lasts four to six months, you can eliminate the majority (if not all) of your debt, and you can start rebuilding your credit sooner.

Chapter 13

A Chapter 13 case will remain on your credit report for seven years from your bankruptcy filing date. The reason a Chapter 13 remains on your credit report for a shorter amount of time than a Chapter 7 is that a Chapter 13 debtor repays a portion of the debt he or she owes under a repayment plan. Typically, a Chapter 13 filing does not negatively impact your credit score as much as a Chapter 7 case.

When you are struggling to pay your debt, it is important to understand all of your debt relief options. Let us review your individual financial circumstances and help you understand which type of bankruptcy filing would be most beneficial to you.

Call us today to schedule your initial consultation. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.


Post-Bankruptcy Credit: Tips on How to Increase Your Score

Melbourne and Brevard County Bankruptcy Attorneys

One of the primary concerns people have when they file a Chapter 7 or Chapter 13 is how their filing will affect their credit score. The truth, however, is that in most cases your credit score is already damaged by past due payments and defaulted loans. Thus, when you file for bankruptcy, the negative impact is minimal. This is especially true in comparison to the benefit of eliminating the majority of your debt and obtaining a fresh financial start. Also, when your bankruptcy case is completed, you can start improving your credit score. Below are a few tips:

  • Credit report. After you receive your discharge order, you should request a free copy of your credit report to verify that the debts are properly noted as being discharged. If you discover errors on your credit report, you should immediately dispute them with the report agency. You cannot improve your credit score until you ensure that your report is accurate.
  • Credit cards. It may seem counter-intuitive to obtain a credit card after emerging from bankruptcy, but you have to have credit in order to rebuild your credit score. It is important that you are responsible with your new credit accounts and only open a select few. You must pay your bills on time and, if you are unable to do so, do not use your cards. Your credit score can be improved by having open accounts, even if you are not using them. Lastly, not all credit cards are treated the same when it comes to credit reporting. The major cards (such as Visa or MasterCard) provide more benefits than department store cards.
  • Secured credit cards. It may be difficult to qualify for traditional credit cards when you first emerge from bankruptcy. If this is the case for you, consider obtaining a secured credit card. This type of card requires you to make a deposit with the cardholder, which is typically 100% to 200% of the total amount of the line of credit extended to you. As long as you timely make your credit card payments, the deposited money will not be touched by your lender.

There are several other ways you can rebuild your credit post-bankruptcy, but the most important thing is to learn from your past mistakes and be financially responsible. With patience and hard work, you will see your efforts payoff with your credit score.

Contact Faro & Crowder, PA for your free initial Bankruptcy consultation

If you have questions regarding filing a personal bankruptcy or other ways we can help you, contact us for a free consultation.


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