There Is Life After Bankruptcy
Most people have serious concerns and questions about filing bankruptcy. The majority of their fears are totally unfounded. Many of the assumptions people have about bankruptcy are the result of myths and misconceptions about the bankruptcy process and its effects.
The U. S. Congress enacted bankruptcy law in order “to give the honest but unfortunate debtor a fresh start.” Congress did not enact consumer bankruptcy laws so that you would lose everything and never be able to buy on credit again. The truth is quite the opposite. It’s better for everyone if you are granted a clean slate and freed from the overwhelming debt. It’s inaction about debt that could cause you to lose everything and not be able to buy on credit again. Bankruptcy helps you to get rid of the debt that hurts your credit rating.
Bankruptcy Puts You Back On Track
It may seem counterintuitive, but bankruptcy can help improve your credit score almost immediately. How? A major component of your credit score is your debt-to-income ratio. When you file bankruptcy, you reduce or eliminate debt. Your debt-to-income ratio will skyrocket. Your credit score goes up, not down. Creditors also know this. They also know that if you filed bankruptcy, you won’t be doing it again for quite some time. They know if you just got rid of old debts by filing bankruptcy, you will be in a much better position to repay a new loan from them.
Most of our clients are pleasantly surprised to learn that they qualify for car loans and credit card accounts almost immediately after bankruptcy. There are even auto lenders who will finance a car loan for you while your bankruptcy case is still active. There are also numerous credit card lenders who will give you a secured credit card after bankruptcy. You place a small amount in a savings account, and they will give you a credit card with a limit equal to the amount you have in savings. If you use the card responsibly and make all payments on time, it won’t be long before you can get them to raise your limit.
Other lenders will see your good credit history after the bankruptcy. You will rebound sooner than you think. Be careful, however. You don’t want to get right back in the same situation that led to the original bankruptcy filing. As your credit score is boosted, it may be possible to start qualifying for prime mortgages within a couple of years if you use credit responsibly and make all of your post-bankruptcy payments on time.
Learn How Bankruptcy Can Be A Positive Move
Every year, approximately 1.5 million individuals and married couples take advantage of the consumer bankruptcy laws in order to deal with overwhelming debt. If everyone lost everything and never had access to credit again, then nobody would ever file bankruptcy. Bankruptcy exemptions prevent the majority of bankruptcy filers from losing any of their property. A bankruptcy discharge gives you a fresh start, so you can purchase items on credit in the future.
Jackson-based Pond Law Firm is a federally designated debt relief agency. Our lawyer helps people file for bankruptcy relief under the Bankruptcy Code.