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Credit After Bankruptcy
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Credit after BankruptcyBankruptcy is a difficult time for consumers. Apart from the social stigma of going bankrupt, there is always the fear that you will never be able to recover your credit ratings. While it is true that bankruptcy stays on your credit record for a longer period than regular items, there is certainly hope for you. In this section, we examine what your financial situation is likely to be after filing for bankruptcy, what will be your credit after bankruptcy, and what you need to look for in your credit report after filing. Bankruptcy can happen to anyoneIf you think that bankruptcy happens only to those who are irresponsible or are trying to abuse the system, think again. In these uncertain times, anyone who loses a job or undergoes a sudden medical expenditure can find themselves in a situation where they are unable to live normally anymore due to the sudden and overwhelming debt.  800,000 Americans file for bankruptcy annually, and this should give you an idea of how prevelant it is - it can happen to anyone. Financial situation after BankruptcyFiling for Bankruptcy under chapter 7 allows you to get a clean start with assets that are exempt from possession. This means that an interim trustee will sell off all assets that can legally be sold away to pay the debtors who are prioritized accordingly. However, certain debts like a mortgage and other liens generally are not discharged for obvious reasons - they are secured loans. In addition, certain other types of obligations such as child support and even income tax (less than three years) remain. The effect of bankruptcy is to provide a person who is doing his or her best to pay regularly, a fresh start, and with the exception of few debts, this is made possible. Status of Credit after BankruptcyAfter bankruptcy, you debts should be shown as zero and paid off, although the record of the bankruptcy is still there. This is a sort of balance which is positive on one side, and negative on the other. Generally, your ability to pay off a debt is increased after bankruptcy due to the absence of other debts. After a period of 10 years has expired, a bankruptcy can be written off your credit record. Accurate Credit Reports after bankruptcyThis is extremely important. You would be surprised to learn that many individuals after bankruptcy still have credit reports that show outstanding debts. Whether due to laziness or carelessness, credit agencies often keep inaccurate information about your debts on their records. This misinformation will most definitely ensure that you never get any credit from anyone again. At Finivcredit, we correspond and negotiate with the credit agencies in accordance with the Fair Credit Reporting Act (FCRA) to ensure that all items on your credit report is accurate after a bankruptcy, giving you a fresh start. The bottom line is, you don't have to let bankruptcy be anything more than what it is - a new shot at life. Contact us for a free consultation. |
