Local Law Firms Home > Bankruptcy & Foreclosure News > Bankruptcy Can Hurt Credit Score For Several Years
The negative effects on a credit score that come from a bankruptcy filing are usually based on a court’s final outcome during the case, also known as the disposition status. The reason that this causes your credit record to raise a red flag to creditors is that you are viewed as high risk, and because of this, it will be difficult to be approved for a new credit card or loan.
One thing that financial experts feel that individuals often miscomprehend is the different meanings between a statute of limitations on debt and how long they can expect their credit score to be impacted by a bankruptcy filing. The legal restrictions of debt have nothing to do with how long a bankruptcy filing remains on an individual’s credit record.
Foreclosure on a home has a comparable effect on credit scores and will stay on a credit record for as many as seven years from the time of the bankruptcy filing. Creditors, financial institutions and underwriters of a mortgage will view a request for a new mortgage as dodgy and will most likely not approve the loan.