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If a Maryland resident filed for bankruptcy nine years ago, that bankruptcy will generally have little impact on his or her credit score or history. However, if that bankruptcy was filed just a year ago, it could have a significant impact on that person’s credit score and history. It is important to note that individuals who file for bankruptcy may not experience negative consequences after doing so.

In some cases, a credit score can actually go up after seeking protection from creditors. This is because a person can have many debts discharged after doing so. Since these debts no longer appear on a credit report, a credit card company or other lender may see that person as creditworthy. Of course, the bankruptcy itself will remain on a credit report for up to 10 years. A Chapter 13 bankruptcy remains on a credit report for seven years.

Individuals should know that not all lenders will want to work with them right away. Furthermore, borrowers will likely be subject to higher interest rates and other less favorable terms until they prove themselves to be responsible again. It is possible for a person to completely rebuild his or her credit in about two years after debts are discharged.

In some situations, filing for Chapter 13 bankruptcy may be an ideal way to get out of debt. This may be true if an individual cannot refinance or consolidate existing debt balances to make them easier to manage. Filing for bankruptcy may also be better than using retirement funds to pay off current debts as they are generally protected in a bankruptcy case. An attorney may provide more insight into which assets are exempt in a bankruptcy proceeding and how long a person could have to make payments to creditors.