According to the United States Bankruptcy Court for the District of Oregon, when you file for bankruptcy in the state, credit reporting agencies may take your publicly filed documents and send the information to credit reporting services who then put the information on your credit report. When doing so, they may indicate that your debt was discharged through bankruptcy and you have no current balance on the account. Although you no longer owe the company any money, you may see your credit score drop significantly as a result. How much your score drops depends on your credit score prior to filing, how many debts were discharged during your bankruptcy and your overall debt-to-income ratio.
Bankruptcy can only stay on your credit report for up to 10 years. However, if you completed a Chapter 13 bankruptcy, it may be removed from your credit report after only seven years. After your debts have been discharged and your credit score shows the impact of your bankruptcy, it is ultimately up to you what happens to your credit from there. Although you were in a tough financial situation when you filed for bankruptcy, it does not hinder you from rebuilding your credit and creating a new financial future for yourself.
It is important for you to understand that you do not have to wait for the bankruptcy to be removed in order to recover from it. To begin rebuilding your credit and increasing your credit score, start by making all scheduled payments on time. This is especially important if you have filed under Chapter 13. After about six months, if you are comfortable and have the financial resources to do so, you may also consider applying for a secured credit card. By making purchases with the card and paying your bill on time, you may not only increase your debt-to-income ratio, but you may also show that you are once again meeting your monthly obligations. Both of these steps may have a positive effect on your credit score. This information is not intended as legal advice and should not be taken as such.