 |
 |
|
How Will Bankruptcy Affect My Credit Score Bankruptcy is legally defined as the inability or impairment of ability of an individual or organization to pay their creditors. You are telling the financial world you are not able to pay your bills, you're broke, you defaulted. That alone should tell you that a bankruptcy on your report will have a significant impact on your credit score. How much will my credit score drop? Only the credit bureaus know this. They are the ones who keep the formula for calculating credit scores. Some basic estimates can be made. If you have perfect credit right now, which is not likely if you have a lot of debt, then you would expect your score to move from excellent to poor. If you have poor credit, then well, it stays around poor. Which brings up a simple yet important question. Should you be concerned about your credit score? Yes and no. Of course you want to eliminate your debts with the least impact possible to your credit score. However, your first priority should be to get out of debt. Having a great credit score and a ton of debt that will never allow you to save and invest is a sure fire way to a future of poor living. Instead, you should look to eliminate the debt, then with the money you no longer are paying towards high interest rate loans like credit cards, you can pay all your bills on time. The most reliable way to improve your credit is to have an excellent payment history. How long does a bankruptcy stay on my credit report? The most widely accepted answer is 10 years. However, remember these rules are determined by the credit bureaus. Also note, the bankruptcy never really goes away. All credit applications, applications for loans, for employment, for renting a home, even for starting a cell phone plan ask. "Have you EVER filed for bankruptcy" Technically you have committed fraud to answer this falsely. So in this context a bankruptcy can stay with you for life. How Can I avoid Filing For Bankruptcy? If you would rather avoid the stigma, cost and stress of filing for bankruptcy and still significantly reduce your debts you have a legal and effective options.
You can read about a debt settlement solution in detail here: What is Debt Negotiation / Settlement? Or you can speak directly with a debt settlement professional and have your questions answered and see if your situation qualifies for this form of debt relief. This is a free and no obligation service. If at the end of this consultation you are comfortable with the service and debt reduction amount you can start right away. If you feel this is not the right solution for you, you have absolutely no obligation or cost. Simply thank your counselor and say goodbye.
|
 |
Want answers now?
|
|||||
