Has your life been suffocated by debt and bankruptcy looks like the only way to breathe? If you have been controlled by debt and want out you need to understand how bankruptcy and credit repair go hand-in-hand. Today, filing for bankruptcy is not as easy as it was two years ago. With new bankruptcy laws now in place, things have changed. Currently, anyone interested in filing for bankruptcy must first go through credit counselling prior to filing.
In addition, before old debt can just be wiped out, further counselling on debt management and budgeting is required. Then, for people with higher income, they will no longer be able to file for Chapter 7 but instead, must repay a portion of their debt as outlined in Chapter 13. This new law makes it much harder to file and it creates a problem in finding a bankruptcy attorney to take the case. Therefore, rather than file for bankruptcy, credit repair may be a better, long-term solution.
Now, if you have already filed for bankruptcy and now your credit report looks bad, credit repair is still an option. The good news is that whether your bankruptcy is new or old, there are options for improving your credit score. With a bankruptcy, the goal is to have all your debt discharged, which makes life easier and credit better. Unfortunately, the bankruptcy just adds negativity to a credit report. Then, when you consider that credit bureaus are allowed to report a bankruptcy for 7 to 10 years, you live with a smudge that can make financial situations difficult.
The bottom line is that trying to qualify for credit or a mortgage loan after bankruptcy is near impossible unless the credit is cleaned up. Therefore, remember that bankruptcy, credit repair programs do exist but you need to be very careful when choosing a company in that they are not all honest. These special programs are designed to improve your credit and raise your FICO score even after filing a bankruptcy. However, keep in mind that cleaning up credit does not happen overnight, it takes time.
Look at it this way, bankruptcy is a legal issue. Therefore, while you may be thinking about filing for bankruptcy as a means of getting a fresh financial start, be careful and consider all your options first. For some people, there are times when a bankruptcy may be the only way to get back on track but today, bankruptcy credit repair is becoming more and more common, especially with the new laws in effect. Even thought the bankruptcy will stay on your credit report for the 7 to 10 years, during that time, you can do other things to rebuild and establish good credit.
In other words, while the bankruptcy may reside on your credit report for years, many lenders and creditors will look beyond the bankruptcy to see what else you have been doing. This means if you pay your other bills on time for an extended period, pay off some of your excessive debt, and show that you are creditworthy, creditors will eventually be willing to work with you. Yes, a bankruptcy will hurt but by using credit repair for other items, you can improve your score and again start to enjoy financial freedom.
Just remember that thousands of companies exist that will promise you bankruptcy credit repair in the form of removing the bankruptcy from your credit report. The truth is that this is impossible. Therefore, while some companies can offer bankruptcy credit repair and improve your credit, actually promising to remove the bankruptcy prior to the 7 to 10 years is nothing more than a scam. These companies will gladly take your $200 to $500 and in return, do nothing for you. Just be wise when working with a credit repair company and above all, educate yourself on your legal rights and the way in which credit bureaus work so you know what is and is not possible.
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