Will filing bankruptcy affect my credit?
The reason many people try to avoid filing bankruptcy is because of the fear of what it will do to their credit report. They don’t consider the many months of late pays and their debt ratios going through the roof as possibly a factor in ruining their credit, but they worry about a bankruptcy filing. When folks come into the bankruptcy attorney and ask Will filing bankruptcy affect my credit? They will typically get an answer like, If you are at the point of filing bankruptcy, your credit is probably already destroyed.
It is a fact that filing Chapter 7 bankruptcy will put a scarlet B. on your credit report for about 10 years and a Chapter 13 bankruptcy will usually hang around for about seven years. This doesn’t mean that credit will not be available to individual’s post bankruptcy filing. After filing bankruptcy a person’s credit report has only one way to go and that is up as long as they practice good financial rules and pay all of their bills on time. A lot of people worry that they will never see a credit card again after filing for bankruptcy or never be able to buy a home. I think this rumor is something that the credit industry would like others to believe. If they could make people believe that they will never own anything and be a financial failure of the rest of their lives, they will have people doing anything to work with them to keep those credit accounts open.
Creditors realize that after an individual emerges from a bankruptcy filing, in many cases they will be debt free or close to it. In the case of a Chapter 7 bankruptcy, debtors wipe out all unsecured debts like credit cards, medical bills and payday loans. If they don’t own a home or have a car payment many of these individuals will be debt free after filing Chapter 7 bankruptcy. This makes this group a great risk to offer credit to. The creditors know that they have eight years that the individual won’t be able to file bankruptcy again and in many cases they are debt free. As long as they can stay employed the creditors see them as a win-win. Initially, credit will come at a price with higher interest rates and these individuals need to be very careful not to over extend themselves at this time. Credit will come back slowly, but usually in a few years the bankruptcy filing will just be a blip in their past.
Getting answers to those tough bankruptcy questions needs to be thought of before you make a decision when it comes to your financial problems. Finding the answers to help you understand your situation more clearly can help you make an informed decision about filing bankruptcy. Take a minute to call or fill out the form to have a FREE NO OBLIGATION CONSULTATION with a bankruptcy attorney in your area.