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I have about 20-25 collection accounts most with balances exceeding the original limit, as well as, a tax lien that has been paid in full one year ago. I have 3 positive accounts, 2 student loans and one auto loan each paid in full on time every month. My credit scores are between 430-500 between the three credit bureaus. I heard that a bankruptcy can drop a person’s score by 100 to 200 points. My question is since I will be filing a chapter 7 and reaffirming my positive debts and all the collection accounts making my score go down will be wiped clean. Will my score go up immediately after the discharge? Even though I will have a bankruptcy on my credit. I have heard this but not for sure how much truth there is to it. Any opinions will be appreciated.

2 Thoughts on Will a credit score go up immediately after a chapter 7 bankruptcy?
  1. Reply
    Todd S
    August 8, 2011 at 10:15 pm

    Your credit score may rise, but shouldn’t be the impetus behind your bankruptcy filing. If it does go up, it’ll likely be marginal, and will take a few years to really improve. The fact that the balances will effectively be “removed” will have a positive impact, but your credit report will also contain a BK which is clearly a negative. Regardless, if you need to file, you need to file, and credit score, as I mentioned above, shouldn’t be the deciding factor.

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  2. Reply
    August 8, 2011 at 10:38 pm

    Filing for bankruptcy does not remove the collection accounts from your credit report. Collection accounts can stay on your credit report for 7 years — even if you no longer owe the money.

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