Financial whiz and New York Times Best Seller, Suze Orman, calms an Oprah caller who's worried about her credit after filing bankruptcy.
When a caller called into the show, she told Oprah and Suze that she recently filed bankruptcy and she was wondering how long it would take to repair her credit.
Suze replied saying:
"It will take approximately 4, 5, 6, years--you know a bankruptcy does stay on your credit report for 10 years, essentially. You can't claim bankruptcy again for 6 or 7 years, so it's going to be there for quite a while."
"And you just need to know that [your credit] will eventually recover and it's not that big of a deal, so don't worry about it, OK, girlfriend."
Of course, Suze's right. Filing bankruptcy does not permanently drop your credit score.
Many creditors love pushing the myth that bankruptcy destroys credit forever.
Keep in mind that bankruptcy is designed to eliminate or reduce debt (including credit card debt and medical bills) and stop foreclosure/repossession.
Also, a bankruptcy filing means that creditors are legally prohibited from trying to collect the debt included in the filing.
Find out (for free!) if Chapter 7 or Chapter 13 bankruptcy could give you the second chance you deserve:
Most of us never think it could happen to us.
But when the bills pile up with insane interest rates and late fees, we start looking for ways to deal with out debt.
Bankruptcy can be a solution for people who are unable to pay their bills.
Read on to learn about the two main types of personal bankruptcy.
Chapter 7 bankruptcy is designed to ELIMINATE unsecured debt.
Unsecured debts are bills that are not tied to property, such as:
Chapter 7 cases typically take 3-5 months to complete.
Once you successfully complete your Chapter 7 case and receive a discharge of your debts, you never have to repay those debts. They are forgiven through the bankruptcy.
Immediately after filing bankruptcy, most people receive the protection of the bankruptcy automatic stay.
The stay is a court order that prevents creditors from trying to collect on your debts. If a creditor violates the order, he or she can be held to strict fines.
Sound like the kind of help you could use? Ask a bankruptcy lawyer (for free) if Chapter 7 bankruptcy could help you:
The other popular form of personal bankruptcy is Chapter 13.
Chapter 13 is designed to stop foreclosure and repossession and give people extra time to repay their debts.
Chapter 13 involves an interest-free repayment plan that typically lasts between 3-5 years.
During this period, you make one lower monthly payment to a bankruptcy trustee. The trustee then pays your debts to the creditors by a priority determined by the bankruptcy court.
If you follow the plan, there's a good chance that at the end of your Chapter 13 bankruptcy filing, the rest of your unsecured debts could be forgiven.
Call 877-349-1309 today to ask a bankruptcy attorney whether Chapter 13 could resolve your debts and save your home.