In today’s troubled economy, many people are carrying heavy loads of debt with little chance of repaying much of it in the near future. Making only minimum credit card payments will take many years to even make a dent in the balance, let alone pay off a card. Combine this one card with a few others and before long, your debt may seem insurmountable. If you’ve had a few late or missed payments, though your intentions are good, your credit score has probably already taken a hit and due to your debt to income ratio, your score could even be as bad as if you’d already declared bankruptcy. If this is the case, it can take many years to raise your score, as the debt will go down slowly. Miss just one payment and you’re right back to the low credit score number where you started from. Surprisingly, declaring bankruptcy doesn’t necessarily damage your credit for 7 – 10 years, as you’ve heard in the past. In fact, after declaring bankruptcy, many are surprised to learn that the following year, their credit is higher than it’s ever been.
Filing Bankruptcy Helping to Improve Credit Scores for many because the debt to income ratio is immediately lowered. When a bankruptcy is discharged, the debts are immediately removed and the filer has a clean slate. Couple that with the fact that the filers income isn’t tapped by overwhelming debt any more and all of a sudden, the filer looks to be a fairly good credit risk. Within a couple years after declaring bankruptcy, if all the bills are current, it’s possible to have a credit score as good as someone who has never declared bankruptcy and always paid their bills on time.
Because Bankruptcy Helping to Improve Credit Scores isn’t a stigma, as it once was, it’s a fairly reliable way to raise your credit to purchase a home or car in the future. It’s always necessary to know why you became overwhelmed with debt originally, as it may have been due to unemployment, illness or disability. As long as the situation is resolved, it’s important to ensure the situation doesn’t happen again. For anyone in debt over the head, Bankruptcy Helping to Improve Credit Scores can help many. Speak to an attorney to see if it will work for you.