What is the effect of Chapter 13 Bankruptcy on my future credit?

Chapter 13 Bankruptcy is a type of legal protection that allows individuals to reorganize their debt under the supervision of a bankruptcy court. Though filing for bankruptcy can have a negative effect on a person’s credit score, Chapter 13 can actually help to improve a person’s long-term credit health. Filing for Chapter 13 Bankruptcy can affect a person’s credit score in the short term, potentially decreasing their credit score by up to 200 points. This is due to the fact that the Chapter 13 filing shows up on the credit report. However, over time, filing for Chapter 13 Bankruptcy can help to improve a person’s credit score. After filing for bankruptcy, a person must make three to five years of payments that are designated by the court. These payments are recorded on the credit report, which can help to improve a person’s credit history. Furthermore, the accounts that are included in the Chapter 13 Bankruptcy filing can be reported in a more positive light than if the accounts had gone to collections. Overall, filing for Chapter 13 Bankruptcy in Washington may initially have a negative impact on a person’s credit score, but it can help to improve a person’s credit health in the future. By making the payments that are required by the court, a person can demonstrate that they are capable of managing their finances in a responsible manner, which can help to improve their credit over the long-term.

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What is the effect of Chapter 13 Bankruptcy on my future credit?

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