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How Will Filing Bankruptcy Affect My Credit Score? | Law Office of Eric Ridley

Bankruptcy will affect each person’s credit score differently depending on their unique financial situation. If you have a  strong score before we file your case, you may experience a significant dip. 

I encourage my clients to view this as an opportunity to start rebuilding from the newfound financial freedom offered by bankruptcy. If you need a bankruptcy – if bankruptcy is the appropriate solution to your financial issues, then focusing on your credit score is putting your energy into the wrong direction. We need to first focus on getting you to a financially healthy spot by eliminating your dischargeable debt, THEN we focus on your credit score.

If your credit score was already weak before seeking relief, you might not see much of any change at all – and in some cases your score may INCREASE.  You can now begin improving it without as many debts weighing you down.

My clients also receive – free – enrollment in the credit rebuilding program at This 14-week course promises to teach you how to ethically and easily rebuild your credit after your bankruptcy discharge, to over 720, in only 24 months.

How Can I Rebuild My Credit After Bankruptcy?

One of the most important things you can do following bankruptcy is to watch your credit report closely. This can help protect you from inaccuracies, and let you get errors removed immediately to avoid adverse effects on your credit score. Also, let your bankruptcy attorney know if creditors continue to report negative items after your bankruptcy discharge. This is illegal, and we may be able to sue your creditors on your behalf and sometimes even get you a damages award (money in your pocket).

Making a career move can be difficult, but it’s important to consider the financial implications. Change too frequently, and creditors may start viewing you as unreliable – making loan approvals harder in the future down the line. Thinking twice before job hopping could save you much-needed stress in your wallet!

All your credit cards will usually close when you file bankruptcy. The 720 Credit Score program will teach you how to get new cards immediately, and how to manage those cards. It’s critical that you put all your new cards on auto-pay, and pay the balances in full every month.

How Can a Bankruptcy Lawyer Help?

A qualified bankruptcy lawyer can help you to determine when (and if) bankruptcy is your best option. We have lots of financial tools in our tool chest. Bankruptcy is only one of them. I will never recommend bankruptcy unless I believe it’s your best option.

I will help you determine which of your assets are exempt from bankruptcy, and which debts are exempt, if any. For most people (over 98% of my cases), you will keep all your property, including your vehicle.

I will also help you file your bankruptcy accurately and protect you if any creditors become aggressive and decide to continue collecting from you after the court says not to.

Further questions? Contact me today at (805) 244-5291 for your free, in-depth debt consultation. Go ahead; I don’t bite!

Will They Take My Property if I File Bankruptcy?

It’s a popular and dangerous myth that Chapter 7 bankruptcy involves selling off assets.

In virtually all cases filed, the debtor (you) gets to keep all of your property, even your car and house. There are some exceptions, but they are infrequent, and we can discuss those if, after I analyze your situation, I believe there’s a risk of you giving up property.

Chapter 13 is more of a repayment plan for individuals. Typically a three to five-year period is set up that the individual can afford, and they work to pay off their debts during this time. Generally speaking, the remaining debt after the agreed period can be forgiven.

What Debts are Exempt from Bankruptcy?

It can feel like a huge relief to consider bankruptcy, but it is important to note that not all debt can be forgiven or legally handled in a bankruptcy process. Some of the debts which are not dischargeable are: 

  • Debt from child support or spousal support. If you are in arrears and hoping to have this debt discharged, it cannot be factored into your bankruptcy relief. 
  • Tax debt. But this is complicated. In many cases, your unpaid taxes are dischargeable. To get you a complete answer, I need to have a 10-minute conversation with you to get more information.
  • Most student loans are also exempt from bankruptcy discharge. In some rare cases, some student loan debt can be included, depending on how the loans are structured. But as a general rule of thumb, student loan debt isn’t included in bankruptcy. 
  • If you owe for a personal injury case in the past or other debts due to court orders, these are also normally non-dischargeable in bankruptcy. 
  • Court fines, DUI penalties, criminal restitution, etc.,  are also almost always not dischargeable in bankruptcy.

This isn’t an exhaustive list, and there are exceptions. Feel free to contact my office to discuss your specific debts and whether they are exempt. You can click here to pick a good time for us to chat by phone or zoom.

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Estate Planning Attorney Eric Ridley