Chapter 13 public record filings usually remain on credit history reports for seven years. When debtors repay all their secured debt delinquency and, in some cases, many of their unsecured debts as well, Chapter 13 does not stay on your credit as long as a Chapter 7. Although the notation remains on a credit report for seven years, the effects of bankruptcy usually end much sooner. Keep reading for more information in this area.

Moreover, in most cases, the seven years is actually two years. Most Chapter 13 bankruptcies last five years. So, the filing notation usually falls off your credit report a scant twenty-four months after the judge closes the bankruptcy. The spices in your kitchen spice rack are probably older than that.

An Athens bankruptcy lawyer cannot change the public record filing notation, but an attorney can help your family make the most of its fresh financial start. Just like chefs know how to present dishes and make them more appealing, attorneys know how to present bankruptcies in a way that avoids undue court scrutiny. Furthermore, only an attorney gives your family the legal advice it needs to make the best possible choices.

Benefits of Chapter 13 Bankruptcy in Athens, GA

Since a Chapter 13 falls off your credit history report rather quickly, there is no reason to let this issue keep you from experiencing the benefits of bankruptcy.

The Automatic Stay is arguably the biggest benefit. Many people file Chapter 13 almost exclusively to stop adverse creditor actions like:

• Foreclosure,
• Wage garnishment,
• Repossession,
• Collection lawsuits, and
• Eviction.

In most cases, the Automatic Stay remains in full effect as long as the bankruptcy is pending. So, creditors cannot initiate these actions either. Normally, banks can only bypass the Stay if the debtor threatens the collateral (e.g. I’m going to burn down the house).

Speaking of your house, bankruptcy also protects this asset. Other exempt assets in a Georgia bankruptcy include your motor vehicle, government benefits, like Social Security benefits, personal property, and retirement account. Outside bankruptcy, it is relatively easy for creditors to seize and sell these assets. Inside bankruptcy, it’s almost impossible for them to do so.

As mentioned, the Automatic Stay usually remains in effect for the life of the bankruptcy. As a result, you family may gradually erase past-due mortgage payments and other secured deb delinquency by making monthly, income-based payments. As long as these payments meet legal requirements, creditors must simply wait for their money. Moreover, an effective Athens bankruptcy lawyer often deters creditors from overstepping their boundaries.

How Chapter 13 Improves Your Creditworthiness

The amount of this monthly debt consolidation payment varies significantly according to the amount of debt to be repaid. But in most cases, it’s about the size for a rent or mortgage payment. This kind of financial commitment requires families to change their priorities. These changed priorities are often painful at the time, but they are a blessing in disguise.

Before we go further, we should examine the difference between your credit score and your creditworthiness. A credit score is an objective number that Experian and other such companies conjure up based on a complex and cold formula. Creditworthiness is your own subjective ability to use credit responsibly.

Chapter 13’s financial discipline improves your creditworthiness. Most people file bankruptcy because of divorce, job loss, high medical bills, or another uncontrollable financial storm. Chapter 13 helps families learn how to build financial reserves which enable them to weather these storms.

Recovering from Bankruptcy in Athens, GA

These financial reserves enable families to skip house and other secured debt payments if necessary. Additionally, payment reserves allow families to pay these loans off early and save thousands of dollars.

Furthermore, an Athens bankruptcy lawyer helps former debtors obtain credit cards. A credit card is the best way to improve your credit score and enhance your creditworthiness. Using the card every month and paying more than the minimum balance every month shows lenders that you know how to manage credit. So, when you apply for loans, you will almost certainly pay a higher interest rate, but the bank is less likely to say “no.”

Honesty is always the best policy in this area. As long as the filing remains on your credit report, be upfront with lenders about your bankruptcy filing and the reasons which prompted it.

Consult with an Athens Bankruptcy Lawyer from Morgan & Morgan

A Chapter 13 filing quickly falls off your credit report, and its effects fade even faster. For a free consultation with an experienced bankruptcy attorney in Athens, contact Morgan & Morgan, Attorneys at Law, P.C. We routinely handle matters in Clarke County and nearby jurisdictions.