Bankruptcy

Credit Rating After Bankruptcy or Foreclosure

By Jonathan Alper

Clients frequently asked me how bankruptcy or a mortgage foreclosure will affect their credit. rating. I usually respond by stating that one?s credit rating is not a legal issue unless there is a violation of federal credit reporting acts. Recently interviewed a new client who worked in mortgage lending. I asked the client to tell me, from his professional experience in lending, how foreclosure or bankruptcy impacts credit.

The client gave me the following guidelines which he said are typical in the lending industries. A Chapter 7 bankruptcy adversely affects credit for two years after the bankruptcy discharge. A Chapter 13 bankruptcy impacts credit for two years after the date the bankruptcy is filed. A foreclosure negatively affects credit for three years after the foreclosure complaint is filed.

If any reader who works in the lending industry has contrary opinion or information, please let me know so I can pass on that information to other readers.

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida

Full post as published by Florida Bankruptcy Law on February 20, 2008 (boomark / email).