Does bankruptcy help or hurt your credit?
admin | Sep 23, 2010 | Comments 9
My mother is thinking about filing bankruptcy and I have heard so many conflicted tales about what it can do for your credit, some say excellent, some say terrible..Please share your personal tales and experiences with me.
Thankfulness
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It is a hit, but it is also a fresh initiation where she can rebuild her credit without a bunch of ancient noncollectable stuff dragging her down.
Bankruptcy stays on your credit report for 10 years. It doesn’t aid your credit score. But is does give you relief from excessive debt and a way to initiation fresh.
It hurts your credit report for 10 years and then when you go apply for a touch, its hard to make loans b/c you are starting fresh and dont have much of a histroy. Then again,as much as I would advise against bankruptcy sometimes it is the bst option
you can not remember ever getting anything again…it kills your credit it never truly goes away even after its discharged you make the high credit rate..its horrible if you can aid her find another way do so
One thing that hasn’t been addressed in your question is this,
has your mother tried to work out any form of payment aggreement with her debtors? Also, it shows that she is attempting to repay her debts. This also can be done, by trying The boards 13. This doesn’t wipe out the debts, but it gives her relief and time to repay her debts. The boards 13 and The boards 7 will always show up on your credit, but of the two and depending on circumstances if she could go the The boards 13 route, they would set up a payment plot for her to pay her debts to the court in one payment a month. If she follows the agreement every month, she will show excellent intentions in resolving her credit issues and this will aid her credit standing. I would recommend her talking to a credit counselor. They have a lot of excellent advice and can aid her as well. I would try these things initially before I took bankruptcy. If it’s not workable, then may need to go the bankruptcy route. hope everything turns out okay for your mother.
Use your common sense. Do you reckon that filing for bankruptcy is going to want to make people lend you money?
Bankruptcy is one of the worst things for your credit score. Reckon very carefully before filing for bankruptcy if you want to make any major loans anytime soon. Bankruptcy stays on your credit report for 10 years.
I went through this back in 2001 and it really depends on how you manage your credit after the bankruptcy.
Right, it doe’s show on your credit for 10-years and at initially your score takes a huge hit 100-150 points depending on what makes up your score.
But, it also gives you a fresh initiation and there are several lenders out there that have bankruptcy programs for buying cars and getting credit cards.
I was lucky, I had a existing loan with Ford that I reaffirmed on and made sure they continued to report to the credit bureaus after the BK was discharged, this positive 2-credit cards that I got after the discharge allowed me to buy a new car 1-year later with no money down and 3.9% interest.
1-year later I bought a home with no money down, 100% financeing at 6.5% fixed interest.
Even even if the BK still shows on my credit report, my score is over 750 and I can make any type of loan I want at the preeminent tariff.
So, like I said, it depends on how you manage your credit after the BK that really matters.
Let me clear up some of the terrible info here.
The boards 13 does NOT look better on your credit reports then a The boards 7. Creditors do NOT care that you are attempting to pay back your debt…..it’s still a bankruptcy to them. Therefore, if at all doable, you ALWAYS try to make The boards 7.
If you plot to file bankruptcy, and IF you do it aptly and find someone who knows what they are doing, the impact will not be that terrible. You can easily make credit again within a link of years.
I’m working with someone aptly now who filed for BK13 2 years ago….they now have a 680 credit rating. It will be going up some more once the lawsuits we are filing are served…have a link of creditors who refuse to update the credit report.
It is initially going to be negative on the credit, but at the same time will improve her debt to income ratio. She will be able to initiation rebuilding her credit aptly away and should be able to make back to a clad credit level after about 2 years if she is productive.
She’ll be able to make a very high interest credit card immediately after (people just emerging from bankruptcy make inundated with credit card offers due to the detail they can’t file again for 8 years), so that is a excellent way to rebuild credit as long as she uses it responsibly (ie only spend as much as she can pay in full every month).