Why Bankruptcy Can Be Good For Your Credit- Bankruptcy can be very good for improving your credit score. A credit score that has suffered from default in payments or other negative credit reporting can be restored though eventually after a bankruptcy filing. Let’s discuss how Chapter 7 Bankruptcy or Chapter 13 Bankruptcy can help restore your credit score.
Bankruptcy can be good for your credit score by wiping the slate clean. After you file Chapter 7 Bankruptcy, the slate is wiped clean on your credit. Everything that was on your credit history before is now replaced with a blank credit history that can be a solid foundation to build upon. If you continue to struggle with your past credit or attempt to settle your debts, your negative credit reporting will stay on your credit report. However, with bankruptcy, your past credit is erased. Your credit is erased and replaced with a single entry: the date, place, and chapter of your bankruptcy discharge. Bankruptcy can be good for your credit by creating a new clean foundation to build upon.
After all of your credit data is eliminated, you will have a new foundation to build upon after filing bankruptcy. Any future good credit payment history will be of a very high benefit to you in restoring your credit. Because this good credit will stand out alone with no blemishes, you will be able to build your credit very quickly.
Bankruptcy can be good for your credit because some people may have a higher credit score immediately after the bankruptcy. Most people believe that after bankruptcy they will have somewhat of an “F” credit rating. However, to most creditors, you more of have a C credit rating. This is because you do not have any more debt on your credit report and you cannot file bankruptcy for approximately eight more years. Many creditors, such as small loan or auto finance providers, are willing to take a chance on such a restored credit situation. This availability of limited loans allows many people to rebuild their credit history even faster after bankruptcy.
Bankruptcy can be good for your credit score because many people are able to get larger loans or even finance houses after two years. Even just two years after filing bankruptcy, it may be possible to be applicable for mortgage loans and loans of a larger nature. If you take the time to carefully rebuild your credit after bankruptcy, you may be able to pursue lifelong dreams such as buying a home. Such possibilities would have been very difficult to achieve for many people outside of starting over with bankruptcy relief.
Do not hesitate if bankruptcy is what your credit needs. If you have excessive defaults and other negative material on your credit report, do not hesitate if bankruptcy is what your credit needs for recovery. Bankruptcy could very likely be the first step in recovering your credit situation so that you can enjoy a life that is not plagued with the difficulties that come with bad credit. If you need help in recovering your credit or want any more information about debt relief, give our office a call.
~Indianapolis Bankruptcy Attorney John F. Bymaster