Credit Consequences

Bankruptcy Lawyer in Ogden, Salt Lake City & Utah County

How does bankruptcy affect my credit?

Despite contrary counsel from credit counseling services, the fact is bankruptcy is the best remedy to a bad credit score. Many people see an automatic increase in his or her credit score immediately after receiving a discharge of debts in bankruptcy. For example, if you have a credit score of 540 before filing, it would not be surprising to see your score automatically jump to 680 after completing your bankruptcy.

Naturally, you will complete your bankruptcy much faster in a Chapter 7 compared to a Chapter 13; so your fastest credit repair will be through a Chapter 7 bankruptcy. Do not be fooled by salesmen whose only goal is to sell the only product they can sell i.e. credit counseling or consolidation etc. These types of programs force all of your accounts into default first, because this is a precondition under their agreements with the credit card companies to begin a consolidation program. Also, your accounts will show “late” or in “default” the entire time you are on the program. This is done so you will not be credit worthy throughout the program lest you incur more debt.

To put it simply, your credit score will not repair during this time, which can be up to 10 years!

Will I be able to obtain credit after filing bankruptcy?

One of the most interesting, but counter-intuitive facts about bankruptcy is that a person that recently obtained a discharge in bankruptcy becomes one of the best candidates for credit in the entire economy. A few reasons contribute to this. First, your credit score increases dramatically to an average 680 (approx). Second, you have no debt, so your debt-to-income will likely be prime to get new loans!!! Third, you cannot file bankruptcy for another 8 years, if you file a Chapter 7 bankruptcy.

The only real “hit” to your credit for filing bankruptcy will be that it will appear on your credit report. Please note that this will not affect your credit score that much. However, many lending underwriters will not lend to you merely because you have a bankruptcy on your credit report-these types of lenders are very uncommon, however. Especially today, a huge amount of the population is filing for bankruptcy so even those scant strict lenders are eroding their stringent underwriting guidelines.

Can I get the bankruptcy of my credit report?

The answer to that questions is yes, but it will likely take a year at the earliest. There are some good credit repair companies that can make this happen for you if it is a concern.

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If you have any other questions feel free to open up a chat (see below right corner), make an inquiry on the right side of this page or call for a free consultation at 801-475-0123.

Find out more about bankruptcy. View the other pages in this section to get a better understanding about the process.

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When it comes to family law and divorce matters, our lawyers take into account how difficult your situation may be right now. As Utah divorce attorneys, we fight aggressively for your rights in litigation, but we will always treat you with compassion and sensitivity — in the same way we would treat our own family members. In fact, the support we provide to our clients is so heartfelt that most remain in contact with us for years after their case has been favorably resolved.

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The American Institute of Family Law Attorneys™ has selected us for two years in a row as one of the best lawyers in the country based on Client Satisfaction. This award is based on our commitment to fulfilling the needs of our clients and helping them get through one of the most stressful situations of their life. As we’ve grown, we’ve developed offices throughout the Salt Lake region in Salt Lake City, Ogden, and Lehi to show our commitment to servicing the families of north-central Utah and beyond.

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If you are seeking legal help on divorce, divorce modification, child support, or child custody, don’t delay in contacting us. The sooner you call us, the sooner you can get things resolved for you and your kids. In some cases, you may only have a limited amount of time to act before it’s too late to defend yourself or get the resolution you want. We know how painful things are right now, and we want to resolve your issues as quickly as possible so you can rebuild your life and the precious bonds you have with your family.

Qualified Attorneys

Sterling Arnold

Attorney

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Partner & Attorney

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Partner & Attorney

Deven J. Coggins

Partner & Attorney

Lauren Schultz

Associate

Cobie Spevak

Attorney

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Credit Consequences

An adversary proceeding is a lawsuit within a bankruptcy case. These occur if many situations, but the most common are where a creditor believes the debtor has concealed or disposed of property of the estate, committed fraud on a creditor when making a loan application, or when a creditor or debtor seeks an absolute determination of the dischargeability of a particular debt.

Creditors in Adversary Proceedings

Arnold and Wadsworth is fully equipped to handle an adversary proceeding for a creditor. These begin by filing an adversary proceeding (this is akin to a complaint in a normal civil lawsuit) after you are served with notice of the bankruptcy by the court or the debtor. There is a timeline when these must be filed, however, and you must be diligent. There is a filing fee and the complaint must be served.

Debtors in Adversary Proceedings

As a debtor, you must be prepared to defend yourself as if you had been sued in any other civil action. This will cost you money, but if you prevail you are entitled to a judgment for all attorney fees against the creditor that sued you. Often, creditors are just trying to get you to settle for some amount and really don’t want to pursue the action. You must file an answer to the adversary proceeding complaint and be prepared to litigate the case to its end.

Arnold Wadsworth & Coggins has handled multiple adversary proceedings for clients. We often handle cases that are referred by other bankruptcy attorneys that don’t handle adversary proceedings, because Arnold Wadsworth & Coggins handles mainly general civil litigation cases, we are well equipped to represent either creditors or debtors in these cases.

Find out more about bankruptcy. View the other pages in this section to get a better understanding about the process.