Many people assume that filing for bankruptcy will ruin their credit score forever. This is not always the case.
Many individuals are able to get credit cards and mortgages soon after their bankruptcy cases are discharged.
It’s important to establish a budget and follow it to show lenders that you are a responsible borrower.
It’s a mark of personal failure
Many people feel that bankruptcy is a mark of personal failure, especially if their financial difficulties stem from factors beyond their control. However, it is important to remember that Congress created the bankruptcy laws to assist good, hardworking citizens with severe debt problems. Rather than being a sign of personal failure, filing for bankruptcy is one of the most responsible and honest steps an individual can take to help themselves and their families.
While it is true that bankruptcy will remain on your credit report for 10 years, it does not automatically ruin your ability to obtain credit. In fact, most of our clients are able to reestablish their credit shortly after the end of their case by showing creditors that they are now debt-free and an ideal borrower for loans.
Seek expert guidance and challenge these myths. Bankruptcy is a legal right, not a stigmatized last resort, and it can be your path to empowerment and a fresh start.
It’s impossible to get credit after bankruptcy
If you have a bad credit score or history, it’s possible to rebuild your financial reputation and become eligible for new loans or cards. However, it takes time and diligence. Ensure that you’re working toward goals and staying within budget. It’s also a good idea to establish an emergency fund.
Many people worry that filing bankruptcy will derail their plans for a new car or home. Fortunately, this isn’t necessarily true. Many lenders are willing to provide loans to people who have filed for bankruptcy, and it’s often possible to secure a mortgage after only two years.
It’s important to note that you can’t discharge taxes and certain other debts, such as child support or alimony. However, if you’re careful to plan for the future and stick to your repayment schedule, it’s likely that you can rebuild your credit history. Eventually, you can qualify for a mortgage or car loan with reasonable interest rates. It’s a good idea to monitor your credit score and spend wisely to avoid any future problems.
It’s a waste of time
Several individuals believe that bankruptcy is a waste of time because they would be unable to get credit again. While it’s true that your credit will take a hit, this impact is short-lived and you can begin rebuilding your credit almost immediately.
Additionally, the moment you file for bankruptcy you will receive immediate protection under a provision called the automatic stay. This means that all collection activity, including phone calls from creditors, lawsuits, garnishments and repossessions, must stop.
The reason the first article of the US Constitution directs Congress to make bankruptcy laws is to give debtors relief from overwhelming debt and a chance at a fresh start. While it is unfortunate that some aspects of life will take a hit after bankruptcy, this does not equate to being a failure and people should remember that Mark Twain, Walt Disney and Elton John all filed for bankruptcy and went on to have prosperous lives. With the right financial planning and budgeting, you can reestablish good credit and a stable financial future.
It’s a waste of money
People often get a lot of information about bankruptcy from friends, family members and other acquaintances. It’s important to make sure that you are getting factual information about the process, rather than misunderstandings or misinformation.
Creditors, banks and other companies may try to scare people out of filing for bankruptcy. They do this by spreading misinformation about the process and its long-term effects. This is not fair to honest, hardworking people who are struggling with serious debt problems.
Almost all unsecured contract debt, including credit cards, personal loans and medical bills can be discharged in bankruptcy. Additionally, Chapter 13 offers exemptions that allow you to keep many or even all of your assets. In addition, most of our past clients were able to qualify for mortgages shortly after their discharges. It’s important to remember that you should still pay expenses necessary for your survival, such as rent, utilities and car insurance. Keeping these essentials in place will show creditors that you are responsible and reliable. For more information or if you need help with bankruptcy or the process, sites like https://www.ljacobsonlaw.com/pa/york-bankruptcy-attorney/ will provide you with a lot of good information.
