Have you been wondering what happens to your credit score after bankruptcy?
Well, for some time before our bankruptcy, our scores (mine and my wife’s) were in the mid-600s. We both continued to get credit card offers until we were late with payments.
Since I filed for Chapter 7 in August 2008, it tanked. I am not sure how much exactly, but here is the current score (drum roll please …):
570 – I at at the 9th percentile of credit scores. Whoo-hoo! I am better than 9% of U.S. consumers, and I just got my chapter 7 discharge!
FICO Score in March 2009
Here is what MyFICO.com says about my score:
Your score of 570 is well below the average score of U.S. consumers. Most lenders consider this score an indication that you are a risky borrower. Based on your score alone, you might expect the following:
- While the types of credit available to you may be somewhat limited, some lenders may approve your loan application, but possibly with higher interest rates and/or with more restrictive terms.
- Lenders may require additional information to help them evaluate your application for credit – factors such as your income or time at job may be reviewed.
- You may be requested to provide an upfront down payment or security on the loan before approval
On the poor to excellent continuum, I am just a shade better than very poor. As expected, the credit score after bankruptcy dropped. But since I now have no debts except those that I reaffirmed (first and second mortgages, two very small loans on our cars), I expect it to improve over the next few months.
Note that I do not plan to get any loans or need credit right now, so this is OK. I still have a second mortgage with a line of credit. I could borrow from that in emergency. But I will try not to.
I will be trying to improve my credit score by getting a secured credit card, and making sure I have no negative marks on my credit report (excepting the Bankruptcy).
I recommend using the free trial from MyFICO to get your credit score after bankruptcy, or preferably before you file. I DO NOT RECOMMEND the creditreport.com or freecreditreport.com websites. That is the subject of another post! Scam alert – you have been warned.
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You visited a few times and I would appreciate your thoughts on this post, why not comment?
Great website and a fantastic idea (blogging about your bankruptcy experience, I mean.)
I’m a consumer bankruptcy attorney in Oklahoma, and I found your debtor’s-point-of-view posts to be fascinating. Also interesting is how the procedure differs (due to differing exemptions, etc.) from state to state. For example, in Oklahoma where I practice, it is nearly unheard of for the debtors to lose property – much less have to buy it back from the trustee. (There are some categories of non-exempt property, but they’re mostly big-ticket toys like boats and second homes, etc.)
One question for you: were you mistaken about the trustee getting your 2008 IRS refund? Seems to me that that would be yours, since you filed your bankruptcy well before you became entitled to it — i.e., before 2008 was complete.
Good luck to you!
I was told to file my 2008 tax return and send a copy to the Trustee. My understanding is that he is entitled to the refund. I would say it is not fair, as I filed in August 2008, and so only part of the year’s refund should go to the bankruptcy estate. But the creditors are otherwise not getting much from me anyway, and this would seem “fair” as far as that goes.
Thanks for the review Ben. If I lived in Tulsa, I would want you as my bankruptcy attorney!