This Bankruptcy Court Letter is the “second step” of the bankruptcy removal process. As you’ve probably guessed, bankruptcy can do some major damage to your credit scores; and it will likely stay on your credit report for quite some time. Luckily, there are ways to slowly repair your credit after you filed bankruptcy, if you choose not to remove it from your credit report. Here are three things to expect regarding your credit score after bankruptcy.
1. Don’t Underestimate The Impact A Bankruptcy Has On Your Credit
Do not underestimate the impact a bankruptcy has on your credit. It is by far, one of the worst things you can do to your credit scores. The exact effects will vary, but according to FICO, a bankruptcy can make a good credit score (700 or above) plummet by 200 points or more. Meanwhile, a less stellar credit score of 680 will drop about 130 – 150 points.
2. A Bankruptcy On Your Credit Report Causes Long-Term Damage
Having bankruptcy information listed on your credit report will impact your credit for quite some time. That’s because the public record of a Chapter 7 bankruptcy stays on your credit report for 10 years. Any other bankruptcy references remain in your credit file for seven years including:
- Chapter 13 public record items
- Any accounts included in a bankruptcy
- Third-party collection debts, judgements and tax liens discharged through a bankruptcy
3. Rebuilding Your Credit After A Bankruptcy
When rebuilding your credit after a bankruptcy, remember that time is on your side. Bankruptcy information will be considered in your credit scores for as long as it appears on your credit report, but its impact on your score lessens over time. In fact, you may even see your score start improve a bit shortly after the bankruptcy hits your report. That’s because you technically no longer owe the debts that got discharged, which could help your credit utilization rate (how much debt you’re carrying versus your total credit limits). FICO estimates that it would take roughly 5 years for a person with a 680 credit score at the time of the bankruptcy to return to that score — assuming they start instituting better credit practices, of course.
Once the bankruptcy information is removed from your credit report altogether, it will no longer factor into your credit scores. This bankruptcy court letter is the “second step” of the “three step” bankruptcy removal process.
THREE STEP SYSTEM INSTRUCTIONS
The steps to use in our “three step system” are as follow:
- Mail off the “Rd. 1” letter to the credit bureaus that have the bankruptcy on your credit report. This first letter is asking the credit bureaus to validated if this account is yours.
- Fill out, print, and mail (with a return stamped envelope) the “Bankruptcy Court Letter” to the bankruptcy court that showing on your credit report.
- When the court reply with a letter, send a copy of that letter and this letter “Rd. 2” to the credit bureaus that have the bankruptcy on your credit report.
Here at Trifecta Financials LLC, we understand that you may not clearly know the steps and what to expect. That is why we are offering you a FREE consultation to discuss what you may be dealing with as far as your credit go. Click Here to sign up for your free credit analysis and consultation. We are here to help guide you through the process….
Disclaimer: Please contact Angela (888) 502-0020, from our customer service department before ordering. All sales are final!!!