A credit score, also referred to as a credit rating, is the score representing an individual's credit-worthiness. In simple terms, it is the rating given to a person's probability of paying his debts.
A person's credit rating is used mainly for three things: to buy a house, to buy a car, and to obtain personal loans. A credit score of over 750 is seen as excellent, while anything below 500 is considered poor.
How Does Bankruptcy Affect a Person's Credit Score?
Filing for bankruptcy will remain on your credit report for 10 years, but may not affect your credit rating for nearly that long. However, the fact that a person is filing for bankruptcy means that he has a lot of debt and is already behind on meeting debt obligations. His credit rating already isn't very good. Depending on your situation, Bankruptcy may actually raise your credit score,
Bankruptcy Process, Declaring Bankruptcy, Bankruptcy Law,
Is There a Positive Side To This?
Bankruptcy certainly can hurt your credit rating, but, there is a flip side to this equation.
You can actually start rebuilding your credit after filing for bankruptcy because there is no longer any negative reporting such as late payments, charge-offs, unpaid accounts and the like. A bankruptcy discharge wipes out all your debt and gives you an improved debt to income ratio. The government designed bankruptcy as a way to start anew.
In Chapter 13 cases wherein you are given ample time to repay past debts, the best thing to do is to make you bankruptcy plan payments on time. In fact, your credit behavior after filing for bankruptcy will do more to help or harm your credit rating than the act of filing for bankruptcy.
Getting approved for a loan might be difficult, but there are certain lending institutions that will extend credit to borrowers post bankruptcy but don't expect to get the best interest rates at first.
If you are down on your luck and filing for bankruptcy is your best option, take the time to sit down and discuss your situation with a bankruptcy attorney. If filing for bankruptcy is something you cannot avoid, then by all means do so. If your quality of life can be improved by the elimination or restructuring of debt, by all means do it.
Take advantage of the fresh start afforded to you by the move and start rebuilding your credit rating. It might prove to be difficult at the start but healthy money management habits will definitely keep you from going into debt again.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
Rating of Bankruptcy Court
Get Online Application at online Bankruptcy Lawyer.
0 comments:
Post a Comment