Wednesday, March 18, 2009

Bankruptcy and Credit Score



By: Jeffrey Kam


Bankruptcy should be the last option that you should consider when your financial situation is doing poorly. If your situation has been doing poorly for a long period of time, declaring bankruptcy may not have any larger effect on you. Filing bankruptcy will appear on your credit score for 10 years; however the creditors will know that you will be not be able to do it again for 7 years. One positive thing that bankruptcy will help you is to stop all the letters and phone calls from creditors and collectors. The credit score will depend on which bankruptcy you choose to file, Chapter 13, or Chapter 7.


Chapter 13 bankruptcy allows you reorganize your financial goal and “work out” a plan to pay off the debt in small amount in specific time frames. This is design for people that have short term financial issue, such as job lost. Although this will show negative affects in your credit score, but this shows you are willing to pay your debt rather than discharging them, you will receive new credit within a year.


Chapter 7 bankruptcy will draw marks all over your credit scores. You must pay all the debt you own and create a barrier between you and new loans for 2 or more years.

Here are some tips that will regain your credit score: avoiding previous mistake that you have done with lead you to bankruptcy. Make a new credit account, this is a new opportunity for you to have a better credit score, just remember to make timely payment, maintain low credit and payoff remaining balance each month.


http://ezinearticles.com/?Credit-after-Bankruptcy---Tips-to-Boost-Credit-Score&id=141231

http://www.moranlaw.net/creditreports.htm

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html

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