Stop Bad Credit


One of the biggest myths about bankruptcy is that it ruins your credit. . .forever. The truth is that filing bankruptcy can actually be the first step in repairing and rebuilding your credit.

Right now if you are struggling to pay your mortgage, car payment, credit card bills, and other debts, your credit score is dropping daily and your overall credit picture is getting worse and worse. Late payments, missed payments, exceeding your credit limit. . .all of this is reported to the credit bureaus by your creditors and negatively impacts your credit rating.

If your car is repossessed, it gets reported to the credit bureaus. If your home is foreclosed on by the lender, it gets reported to the credit bureaus, if a lawsuit is filed against you by one of your creditors, it gets reported to the credit bureaus. If you have liens or judgments against you, they get reported to the credit bureau.

When you are in a financial crisis, your credit rating can suffer tremendously because of the cumulative effect of all the negative reports from various creditors. If you’re like most people, by the time you make the decision to file bankruptcy, your credit will already by pretty bad and it will take another hit when you file bankruptcy.

But don’t roll you eyes and start thinking everything you’ve heard about how bad bankruptcy can be is true because there’s a lot more to what I’m trying to tell you. You see, one of the amazing things about filing bankruptcy is that it stops the aging process on your debts. So, if you are a few months behind on your credit card bills, those creditors can no longer report any further delinquency on those debts after you file bankruptcy. If you are five months behind on a bill when you file, it will continue to be reported as five months behind. The delinquent history on your debts will not grow. That alone will stop your credit from being damaged any further.

The other amazing thing about filing bankruptcy is that it allows you to wipe out certain debts permanently. That means that your debt to income ratio will improve once you receive a discharge. If you file a Chapter 7 bankruptcy, you will probably receive a discharge in as little as 90 days. At that time, most of your unsecured debts, like credit card bills and medical bills, will be eliminated, likely resulting in a boost to your credit score.

If you file a Chapter 13 case, you’ll have to wait three to five years to get a discharge. However, during the life of your Chapter 13 case, you’ll be paying your mortgage, car payment, and other secured debts. Depending on the composition of your Chapter 13 plan, you may even be paying some of your unsecured debts. So, not only will filing bankruptcy stop the aging on your debts, it allows you to restructure them and pay them over time. This means that your creditors will not be reporting that you are late, over them limit, or in default on the debt. At the conclusion of your case, you will receive a discharge and any unsecured debts that remain unpaid will be discharged.

The first step in rebuilding your credit is eliminating debt. Filing bankruptcy allows you to do this. When you pay off or eliminate debt, this means that you have more income available and, thus, are able to afford new credit. But beware of all the credit offers that you will receive once your case is discharged. Car dealers and credit card companies love newly discharged debtors because they have little or no debt. Many of the offers you’ll get after your case is discharged are meant to suck you back into the black hole of debt out of which you just crawled and that is certainly a place you don’t want to return.

Another myth about bankruptcy is that the new laws that went into effect a few years ago make it all but impossible to file. Again, this simply is not true. The new laws merely changed how people qualify to file bankruptcy. But each year, millions people file Chapter 7 and Chapter 13 bankruptcy and each year millions of people receive a discharge and get the fresh start they were seeking.

Don’t let all the untruths about bankruptcy stop you from exploring it as an option to help you get out from under the debt that is drowning you. At Bankruptcy Professionals we help people just like you each and every day and we have a proven track record of helping our clients take the first step in rebuilding their credit.

But it’s up to you to call us. If you want to protect your family, your property, your income, and your reputation, you need to pick up the phone right now. Our bankruptcy attorneys are well versed in all aspects of bankruptcy law and are prepared to answer all of your questions.

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