How will filing bankruptcy affect my credit and ability to borrow money?
The damage of a bankruptcy filing to your credit is probably much less than you expect. (I’m shocked at how many people actually believe that you can’t get credit cards or loans for 7 or even 10 years after filing). In fact, most people considering bankruptcy have a record of late or missed payments and/or high credit balances reflected in their credit report. Some may also have charged off accounts or even accounts in collection. Their credit score is already low. For these people, the horse is already out of the barn. The task is to improve their credit score as quickly as possible, so they can again borrow at competitive rates. Filing bankruptcy in such a situation does not have a major negative impact on your credit score and, in some instances, may actually improve your credit score. How is this possible? High debt balances, late payments, and charged off accounts are wiped clean on the credit report when you file bankruptcy. These debts continue to show as “Included in Bankruptcy
July 30, 2010 By Greater Boston Law The damage of a bankruptcy filing to your credit is probably much less than you expect. (I’m shocked at how many people actually believe that you can’t get credit cards or loans for 7 or even 10 years after filing). In fact, most people considering bankruptcy have a record of late or missed payments and/or high credit balances reflected in their credit report. Some may also have charged off accounts or even accounts in collection. Their credit score is already low. For these people, the horse is already out of the barn. The task is to improve their credit score as quickly as possible, so they can again borrow at competitive rates. Filing bankruptcy in such a situation does not have a major negative impact on your credit score and, in some instances, may actually improve your credit score. How is this possible? High debt balances, late payments, and charged off accounts are wiped clean on the credit report when you file bankruptcy. These debts continu
