Some people, such as people in the credit card industry, don’t want people to know the truth about bankruptcy (because if your bills are discharged, they won’t get paid!).
For this reason, there are misconceptions about bankruptcy — especially when it comes to credit scores after filing. To learn how your credit may be affected, talk to a lawyer.
The truth: Bankruptcy DOES NOT have to hurt credit scores.
It’s true that a bankruptcy filing will stay on your credit report for up to 10 years (typically 7 years if you file under Chapter 7 bankruptcy), but it doesn’t necessarily mean your credit will be in the dumps during that time.
It will probably be tougher to get loans or low-interest credit cards right after filing bankruptcy, but if you are seeking bankruptcy relief, your credit may not be so great to begin with.
As you keep on top of monthly payments for your rent, mortgage and utility bills, you’ll be strengthening your credit report.
If you do your research you should be able to find a starter credit card that will help you jump start your good credit history again.
This card will probably have a higher interest rate, but the point is to charge items that you normally would have bought with cash and pay it off each month (or at least pay more than the minimum monthly payment).
By using credit wisely, you’ll be proving to the credit reporting agencies that you’re a responsible credit user. If you keep those habits up, you’ll likely see your credit score rise in 1-2 years after filing.
Your credit score probably wasn’t the best it could be before you filed bankruptcy, and it will take time to boost it up, but it can be done if you stay dedicated to responsible spending.
For all the negative publicity bankruptcy can get from credit card companies there is little talk about the positive side of bankruptcy.
Millions of people have filed for bankruptcy protection.
Personal bankruptcy was designed to:
Many people have been able to eliminate their bills by filing Chapter 7 bankruptcy and others have been able to stop foreclosure and save their homes by filing Chapter 13.
Now that you know more about bankruptcy and credit, you probably want to learn more about the bankruptcy process.
A local bankruptcy attorney can inform you of the bankruptcy laws that may help you eliminate debt. Connect with an attorney today.