People who are considering filing for bankruptcy in order to gain credit card debt relief or help with other kinds of deep indebtedness, often ask what effect this action will have on their credit score. They’ve been told and taught that they will never recover their credit score if they file for bankruptcy. However, the truth is quite the opposite. True recovery and true credit score recovery start with debt relief. Modern credit scores depend on low debt levels, and this starts immediately after the filing of a bankruptcy petition.
It depends on your starting point
Filing for bankruptcy will be reported on your credit report, but the effect on your credit score will depend on your credit score before filing, and how you rebuild your credit score through sound post-bankruptcy and proven practices for credit restoration. Most Connecticut residents seeking debt relief are great payers with falling credit scores due to their unhealthy debt-to-income ratio as reported on their FICO scores as high utilization. High credit scores are only available to those who have low debt loads. Perfect payers no longer have perfect scores. They waste hundreds or thousands of dollars each month and still endure falling credit scores.
People file bankruptcy for debt relief, but it actually improves credit scores.
The Best Way to Rebuild Your Credit Score
While it’s not good that you find yourself in a situation where you have to file for bankruptcy, it is actually the best avenue to raise your credit score and keep it solidly high. The myth of “no credit after bankruptcy” is not true. People don’t need to fear the solutions provided by the country’s bankruptcy protection laws. In fact, Lenders love post-bankruptcy clients. If you don’t file for bankruptcy and your unpaid debts continue to accumulate, this will be far more damaging to your credit score than any bankruptcy filing. Additionally, your debt-to-income level will continue to ruin your credit score. Unpaid bills create tanking credit scores that require solid advice and a sound solution.
Post-bankruptcy clients qualify for regular rate credit cards immediately along with solid rate car loans. Often these loans are far better than any pre-bankruptcy offerings. We don’t file bankruptcy to improve your credit, but it will eventually give you the highest credit scores available.
Bankruptcy, while often delivering a short-term knock to your credit, not only enables you to reduce your debt load and get your true finances under control, but it also immediately starts the process of rebuilding your credit. If you come to the point where bankruptcy is your best option to obtain financial recovery, rest assured that the damage to your credit will be temporary. In addition to solving your financial problems, bankruptcy is an effective tool for revitalizing your credit and re-establishing the highest possible credit score.
If you are looking for credit card debt relief, contact the Law Offices of Neil Crane, LLC, the most experienced debt relief attorneys in Connecticut. Please call us at 203-230-2233 or fill out our online Contact Form or call to speak with an attorney directly today.