Doing Things The Right Way When Declaring Bankruptcy

Doing Things The Right Way When Declaring Bankruptcy

Many debtors have the common misconception that filing for personal bankruptcy is the worst thing that they can do to their credit score. This is not the case. Your score will be substantially lower, if you continue to juggle payments that you cannot afford. The late payments on multiple accounts will cause more damage than bankruptcy. Read on for more tips concerning bankruptcy.

Don’t think of bankruptcy as the ruination of your financial future. Once your bankruptcy has been discharged, you can begin to work on re-building your credit right away. By continuing to make timely monthly payments and not applying for new credit, you can significantly raise your credit score within 6 months. And, if you maintain good credit for that amount of time, you may find it possible to get approval for loans to make large purchases, such as a home or car.

Seek advice from a debt consultant before you file for bankruptcy. Deciding to file for bankruptcy is not something that you should do without first seeking advice from a financial expert. This is because filing for bankruptcy will seriously hinder your ability to secure credit in the coming years.

Filing for bankruptcy will not only just stop credit card companies from harassing you about debt. It will wipe out many of your debts, which may include utility company bills, wage garnishment and foreclosure. It will reduce all of these debts down to zero, and you will have to rebuild your credit all over.

Now that you know some of the facts regarding personal bankruptcy, you should have a better idea if it is the best financial move to make. Carefully consider the amount of debt-to-income that you have. Use the calculation, as well as, how many late payments you face each month, as a guide to decide.