All Minnesota consumers contemplating a bankruptcy filing should know these five facts about how bankruptcy really affects their credit.

Minnesota consumers should never take the decision to declare bankruptcy lightly. Both Chapter 7 and Chapter 13 bankruptcy filings cause credit score damage and major lifestyle changes. However, for many indebted consumers in Minnesota, bankruptcy is still the best option. It completed, the process can leave filers with the ability to start over with little to no debt. Of course, before any Minnesota consumer files for either Chapter 7 or Chapter 13 bankruptcy, they should know all of the facts.

Fact vs. Fiction when it Comes to Filing for Bankruptcy in Minnesota

Unfortunately, there are a lot of misconceptions about bankruptcy (BK) out there. This can make an already complicated process even more confusing for Minnesota consumers wondering whether or not they should file. However, if you get the facts straight about BK and your credit, it is easier to determine if bankruptcy is the best option for you. After all, for some consumers, there are alternative solutions.

Fact #1 – Even those who enter bankruptcy with little to no negative information on their credit reports normally emerge with lower credit scores.

For example, if one unlucky business decision leads to bankruptcy, you may have a mostly spotless credit history. Yet, it is the BK itself that brings down your credit score – often by as much as 200 points. Then, later, the credit score damage depends on the amount of time passed since the bankruptcy and the filer’s credit repair efforts.

Fact #2 – You can start to improve your credit score before the BK falls off your credit reports.

It is, of course easier for consumers in Minnesota to significantly improve their credit scores after bankruptcies fall off their credit reports (within 7-10 years after filing dates). However, you can start to repair your rating immediately after discharge (Chapter 7) or during your repayment period (Chapter 13).

Typically, credit experts advise Minnesota BK filers to pay all bills in full and on time and to use credit sparingly when they qualify for credit cards. Once you start using credit again, it is best to charge one or two necessary expenses per month, then pay off the bill when it comes. This way, you can use your credit card as a credit building tool while avoiding debt.

Fact #3 – Bankruptcy does not affect all Minnesota consumer equally.

Even though BK affects all Minnesota credit scores negatively, the severity of the damage depends on several factors. For example, in Chapter 7 bankruptcy, filers with only a few debts discharged normally lose fewer credit score points than those with numerous discharged debts. Also, after BK, the proportion of negative vs. positive accounts on your credit reports figures into credit score calculation.

Fact #4 – You cannot discharge all types of debts through Chapter 7 or Chapter 13 BK.

Minnesota consumers considering bankruptcy should consider the types of debts they want discharged or reduced. Unfortunately, some debts such as those incurred through missed alimony, child support, and federal student loan payments are not affected by BK filings.

Fact #5 – Bankruptcy won’t necessarily ruin your credit forever.

Life, luckily, isn’t a game of Monopoly. So, bankruptcy doesn’t mean “game over” or “you lose.” No, BK isn’t an easy process. And, yes, it does take most Minnesota filers several years to fully recover after discharge. Yet, as mentioned previously, with responsible credit use and money management, you can fully bounce back from bankruptcy. In fact, you may find that, eventually, you are in a much better place than you were before filing.

Why All Minnesota Bankruptcy Filers Should Check their Credit Reports

Creditors and the credit bureaus frequently make mistakes with consumer information that lead to errors on regular credit reports. Therefore, when Minnesota consumers undergo the complicated bankruptcy process, they can expect some glitches in credit reporting.

For example, the credit bureaus must correctly identify discharged debt, or filers can lose even more credit score points. Or, for Chapter 13 cases, debts included in repayment plans must also include accurate statuses. Therefore, Minnesota bankruptcy filers who want to improve their credit scores as quickly as possible should check their credit reports after discharge (Chapter 7) or during their repayment periods (Chapter 13).

Just go to, and request your free annual credit reports from TransUnion, Equifax, and Experian. Then, while looking through your credit reports, if you spot credit score damaging mistakes and errors, contact Credit Repair Lawyers of America in Minnesota. By trusting our firm with your bankruptcy-related credit issues, you get immediate access to an experienced credit attorney who will do whatever it takes to get you clean credit reports – legally and for free.

The Free and Legal way to Get Better Credit after Bankruptcy in Minnesota

Don’t let bankruptcy-related errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? The law allows us to collect our fees and costs from the defendants in any successful action.  This is why our clients pay nothing for the work we do.

Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (612) 235-4458 or sending him a message through our contact page.

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