Can Filing For Bankruptcy Actually Improve a Person’s Credit?
While bankruptcy can have significant benefits for many people, one of the main drawbacks is that the fact that you filed for bankruptcy can appear on your credit score for up to ten years. As a result, many people who are considering bankruptcy may be hesitant to actually file because they believe that it will be difficult or impossible to obtain financing at a reasonable interest rate for several years. For certain people, however, the existence of a bankruptcy on their credit report is actually an improvement to their current situation. To determine if this applies to you, you should discuss your circumstances in detail with an experienced bankruptcy attorney as soon as possible.
How Can Bankruptcy Help?
If you are considering bankruptcy, you are probably already having difficulty meeting your financial obligations. This likely means that your credit report has numerous delinquencies, collection accounts, judgments, or defaults that are driving your credit score down. By filing for bankruptcy, a person can discharge most – if not all – of their delinquent debts and start over with a clean financial slate. Some of the types of debts that may be eliminated by Chapter 7 bankruptcy include:
- Medical bills
- Credit card debts
- Certain tax debts
- Unpaid rent
- Utility bills
- Personal loans
- Civil judgments
- Unsecured loans
- Benefits overpayments
While it is true that your credit will be negatively affected by filing for bankruptcy, it will also provide you with an opportunity to develop a positive credit history. As a result, many people who file for bankruptcy have a much better credit rating fairly quickly after re-establishing their credit by regularly paying on secured purchases or credit cards. Ultimately, filing for bankruptcy is often a better option that continuing to let old debts accrue interest and negatively affect your credit rating.
Contact a Long Island bankruptcy attorney today to schedule a free consultation
If you are having difficulty keeping up with your financial obligations and it is affecting your credit score, bankruptcy may be able to help. To schedule a free consultation with Long Island bankruptcy lawyer Ron Weiss, call our office today at (631) 402-5967.