When a Louisiana resident files for bankruptcy, it no doubt has numerous consequences in his or her immediate financial future. There are various types of bankruptcy and determining which type best fits a given set of circumstances can be challenging. Once a solid solution is found, however, debt relief can help avoid foreclosure and even wipe the financial slate clean. It also typically has an impact on a credit report.
Depending on whether a person files Chapter 7 or Chapter 13 bankruptcy, the filing will show on the filer’s credit report for seven to 10 years. After bankruptcy, when the person seeks to obtain a line of credit, prospective creditors conduct hard inquiries. A hard inquiry means that a creditor is thoroughly reviewing a person’s credit report.
The problem is that whenever a hard inquiry is made, points are deducted from the person’s credit score. On occasion, such as if he or she is applying for a mortgage loan, such deductions may be waived if numerous hard inquiries occur within a short amount of time. Instead of each inquiry being treated separately, when multiple inquiries pertain to the same application, the system is set to treat them as a single review.
Just as certain forms of debt relief, such as bankruptcy, remain on a credit report for a number of years, each hard inquiry remains on a credit report for up to two years. Such issues should be kept in mind when someone is considering what type of debt relief might be the best option to help resolve a financial crisis. Any Louisiana resident with questions about hard inquiries or other bankruptcy issues may reach out for support from an experienced debt relief attorney.