Obtaining Credit After Bankruptcy, is Chapter 7 or Chapter 13 Better?
Many clients worry about obtaining loans or an extension of credit after bankruptcy. Most clients are under the impression that Chapter 13 is “better” and that creditors will look more favorably upon them after a bankruptcy if they filed under Chapter 13 instead of Chapter 7. Many know that Chapter 13 involves repaying at least a portion of total debt through a payment plan. Truthfully, I doubt whether this factors into a creditor’s decision to extend credit to someone after a bankruptcy. Clients also ask which type of filing is “better” for their credit score after bankruptcy. The truth is there are many factors that play into determining a credit score and the exact formula used to determine a credit score is probably only known by a select few (the following website appears to contain some good information on what factors are used to determine your credit score: http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx) I usually advise clients not to be concerned about the effect
