How does Chapter 13 Bankruptcy affect my ability to acquire new credit?

Chapter 13 Bankruptcy Law in New York has an effect on an individual’s ability to obtain new credit. After filing for bankruptcy under Chapter 13, a debtor will receive a discharge of all debts, except for certain debts that might not be discharged. This includes taxes, student loans, and debt incurred from fraud. Because of the discharge, it is difficult to acquire new credit right after filing for bankruptcy. Credit card companies, mortgage lenders, and other lenders, may see a bankruptcy filing as a sign of financial instability and may be hesitant to offer new credit. Additionally, bankruptcy affects an individual’s credit score and credit report which can also make obtaining new credit difficult. However, if an individual has been able to improve their financial situation and make payments on time during Chapter 13 proceedings, creditors may be more likely to extend credit. Even after filing for bankruptcy, it is possible for a debtor to improve their credit score and apply for new credit. It is important to keep in mind that, while bankruptcy has an effect on an individual’s ability to obtain new credit, it does provide a fresh financial start and can help individuals make a plan to pay off their debts. While bankruptcy remains on a person’s credit report for seven to ten years, it is possible to rebuild credit and move forward financially.

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How does Chapter 13 Bankruptcy affect my ability to acquire new credit?

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