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Life After Bankruptcy

Many people consider “bankruptcy” a bad word, and while it is true that it will have an initial negative affect on your credit, for many people it can improve their financial situation over the long term. Many people who consider filing for bankruptcy have found themselves in a situation where they are not able to continue to pay all their debts and still cover the normal expenses. This can mean that many bills have gone unpaid or have been paid late, and the debtors credit score has started to plummet.

The goal of a consumer bankruptcy case is to allow debtors to receive a discharge, which is a permanent injunction that prevents creditors for collecting on their debt. This discharge eliminates much of the debtor’s debt and the only negative reporting the debtor will receive is the bankruptcy filing itself.

While a bankruptcy can be reported on a credit report for up to 10 years, with much of the debt discharged the debt to income ratio will improve, helping repair a debtor’s credit. In many cases a debtor’s overall credit may even be better then where it was just prior to filing in as short of a year of filing.

Many debtors mistakenly think that it will be many years before they can purchase a home or refinance an existing home. In reality, many debtors become eligible in as little as one year.

A debtor can rebuild their credit after a bankruptcy, by maintaining or taking out one or two small secured credit cards and routinely using them and paying them off. Also, payments to reaffirmed debt like a car and mortgage made on time will also help improve the debtors credit score.

The attorneys at Fears | Nachawati will review your credit situation and can help you decide if filing for bankruptcy is right for you. In addition to offering a free consultation they will also provide you with a credit report that provides your credit score. For more information call today 1.866.705.7584 or send an email to