Improve Your Credit Rating

Which Bankruptcy Is Better For Your Credit?

which bankruptcy is better for credit rating
Edited by Neil Ackerman

In this short post you can see which bankruptcy might be better for your credit situation…

Chapter 7 is better than Chapter 13 and here is why. For most people who are looking to file bankruptcy the choice really comes down to filing a Chapter 7 bankruptcy or a chapter 13 bankruptcy. I believe that in most situations people are much happier with the benefits offered in a chapter 7 bankruptcy case.


You Will Recover More Quickly From A Chapter 7 Bankruptcy

Most people are surprised that their credit score has actually increased 12 months after their Chapter 7 bankruptcy case is complete. Further, most people are unaware that if you have good payment history after your chapter 7 case, the Federal Housing Administration can qualify you for a home loan within 2 years of your bankruptcy case being completed. While you can also qualify for Federal Housing Administration loans while in your chapter 13 case, the reality of this is you are going to have a more difficult time getting financing while you have an active bankruptcy case, and in Chapter 13 you will have an active case for 3 to 5 years.

There is no question that filing a chapter 7 bankruptcy hurts your credit, but it is a static event every day you get further away from it the more likely you will be able to obtain new financing if you need.

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About the author

Neil Ackerman

Mr. Ackerman is an attorney with 35 years’ experience, focusing on Bankruptcy Law, Debt Restructuring & Workouts, & Litigation, with a 5.0 “AV® Preeminent Peer Review Rating” in the Martindale-Hubbell Law Directory. Mr. Ackerman has also been interviewed on television (CNBC and News 12-Long Island), and quoted in Inc. Magazine, and in articles published in New York Newsday.