Have you ever wondered, How long does Chapter 13 stay on your credit? In most cases, a Chapter 13 filing stays on a credit report for seven years. That’s substantially less time than a Chapter 7, because in a Chapter 13, debtors repay most of their obligations over time.

A persistent myth about bankruptcy is that a bankruptcy filing “ruins” your credit. This myth is untrue. First, if you are considering bankruptcy, your credit score is already probably quite low, because it is riddled with late payments and other negative information. Second, the overall effect of bankruptcy is often minimal. Third, if you take full advantage of bankruptcy’s fresh start, you can quickly erase the negative effects.

An Athens bankruptcy lawyer does much more than file paperwork. A bankruptcy lawyer stands with you throughout the process, and helps you put credit problems behind you.

Bankruptcy Benefits in Athens, GA

Since Chapter 13 does not stay on your credit record very long, and since its effect on your score is rather minimal, do not let bankruptcy-phobia, or an unnatural and irrational fear of bankruptcy, prevent you from reaching out to an Athens bankruptcy lawyer. If nothing else, an attorney can at least give you solid advice, so you make decisions based on evidence instead of myths.

Additionally, the benefits of bankruptcy are substantial. The Automatic Stay, protected repayment period, and debt discharge are the three biggest ones.

Section 362 of the Bankruptcy Code immediately prohibits most forms of adverse creditor actions, including:

• Foreclosure,
• Wage garnishment,
• Repossession,
• Collection lawsuits, and
• Eviction (in most cases).

In a Chapter 13, the Automatic Stay remains in effect for up to five years. During this time, debtors make income-based payments which erase secured debt delinquency. As long as the monthly debt consolidation payment timely takes care of all necessary obligations, creditors must wait in line for their money, because it’s almost impossible to bypass the Stay.

When the judge closes the bankruptcy case, the judge also discharges most unsecured debts, such as credit cards and medical bills. This discharge allows families to take better advantage of their fresh starts.

Some Post-Bankruptcy Success Stories

Since Congress created the modern Bankruptcy Code, countless individuals, families, and organizations have used bankruptcy’s benefits as a springboard to a better financial future. Here are just a few examples.

Henry Ford

The world remembers Ford as an automotive industry titan who pioneered improvements we take for granted today, like assembly line production and a five-day workweek.

The world does not remember that, before his big breakthrough with the Model T, Ford declared bankruptcy twice. Ford’s constant tinkering, and his lackluster financial ability, torpedoed both the Detroit Automobile Company and the Henry Ford Company.

Ford’s determination and vision made his prior bankruptcies a historical footnote. Your determination and vision, along with an Athens bankruptcy lawyer’s help, can do the same thing.

General Motors

In 2009, the struggling automaker filed bankruptcy, mostly because of the Great Recession which was raging at the time. Bankruptcy gave the industrial giant a chance to pause and reorganize. As a result, less than two years later, its profits roughly doubled.

Walt Disney

Disney started his first animation company in 1920. At first, the company made money. Then, a series of misfortunes, none of which were Disney’s fault, forced that company into bankruptcy. The same year the judge discharged Disney’s bankruptcy, he started a new company. Free from debt and creditor harassment, Disney was free to focus his energy on his business. The result was Mickey Mouse in 1928, and the landmark animated feature Snow White and the Seven Dwarves in 1938.

Bankruptcy gave Disney a fresh start, and he made the most of it. An Athens bankruptcy lawyer gives you the chance to write your own success story.

Building Credit After Bankruptcy in Georgia

Although a Chapter 13 filing entry remains on your credit report for seven years, most lenders only care about recent financial activity. Our Athens bankruptcy lawyers have helped many families turn things around quickly, and we can do the same thing for you.

One of the best ways to raise your credit score fast is to demonstrate responsible credit use. And, we have professional partnerships with lenders who work with bad credit borrowers. So, buying a car or even a house shortly after bankruptcy is a real possibility. Your buying choices might be limited, and you might pay a higher interest rate than other borrowers, but the bank will say “yes.”

Ten or fifteen months of recent on-time payments says a lot more about your current creditworthiness than a bankruptcy which is several years old and, for the most part, was not your fault.

Get in Contact with a Bankruptcy Lawyer in Athens, GA

If you’re asking how long does Chapter 13 stay on your credit, you’re ready to get more information. Technically Chapter 13 stays on your credit report seven years, but the effects usually fade much faster. For a free consultation with an experienced bankruptcy lawyer in Athens, contact Morgan & Morgan, Attorneys at Law, P.C. The sooner you reach out to us, the sooner we start working for you.

Christopher Ross Morgan

Christopher Ross Morgan

Christopher Ross Morgan focuses on bankruptcy cases, specifically Chapter 7 and Chapter 13 cases. Christopher also takes on Disability and Workers’ Compensation cases. As one of the most accomplished Chapter 7 and Chapter 13 attorneys in Athens, Georgia, he has fought cases through jury trials and argued cases in front of the U.S. District Court, Northern and Middle District of Georgia.