BANKRUPTCY
Each year more than 900,000 Americans file for protection under Federal
Bankruptcy Laws. Unfortunately, some are credit abusers or just not financially
responsible, but on the average, the person or persons filing for bankruptcy
relief are average working individuals or families who are trying to pay all of
their bills. Somehow, they find themselves in financial trouble.
Be it the sudden loss of a job or income, mounting medical bills, a divorce or
even a natural disaster can quickly wipe out a life's savings. For many,
Bankruptcy provides a second financial chance. In some cases, it can shed
tremendous stress and provide the opportunity to rebuild from scratch.
Generally, filing a Bankruptcy is a last resort. While it should not be entered
into lightly, it may prove itself to be a positive solution for you. To learn
more about bankruptcy, read the articles provided in this section below.
As a credit consumer you need to be perfectly clear on one issue; BANKRUPTCY IS
BAD FOR YOUR CREDIT!
Contrary to popular belief bankruptcy does not "clean up" your credit.
Bankruptcy will remain on your credit report for 7 to 10 years. Many people
believe that filing bankruptcy and obtaining a discharge of their debts will
lead to a complete clean start for their credit and will usher in new credit
opportunities. Don't believe it! Rebuilding your credit after bankruptcy is a
long process, even though it can be done. Don't delude yourself into believing
that the interest rate a credit card company will charge after bankruptcy will
be the same as for a consumer without a bankruptcy.
There are other pitfalls to be aware of, such as with the I.R.S and student
loans, and even some retail companies that will not discharge your debts. The
effects of bankruptcy will be felt long after the process is over. This is not
to say that bankruptcy is always the wrong choice. In cases of elderly debtors
or when property is at risk, bankruptcy may be a viable alternative, however
having one or two bad credit years and bad credit references on your credit
report is far easier to explain to lenders than a bankruptcy filing. Think long
and hard before making a decision on something that could effect you for many
years like bankruptcy.
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