In most cases debt is inevitable,
When going thru rough financial times, more often than not, we seem to see very limited options available to us. When debt overtakes or day to day life, and when it seems there is no light at the end of the tunnel, we enroll in one of the most forgiving systems our government has to offer; Bankruptcy.
Bankruptcy offers a fast emotional, financial, and legal relieve on what seems impossible to avoid: Debt. The US Constitution recognizes that it is a legal right of all citizens. Chapters 7 and 13 are the best known about bankruptcy, because they determine to a greater extent, the appropriate path for each case.
What should you know before filing for bankruptcy?
Every individual in financial trouble has the right to file for bankruptcy, but they also have a duty to know what this entails, from a legal, financial and emotional point of view.
Once a consumer files for Bankruptcy, their credit file will be severally affected negatively for years to come.
What kind of damage would your credit file take?
It depends on the type of negative information the bankruptcy bring…PLUS, other items neglected on your credit file. Here is a basic summary of what different types of negative information remain on a credit report:
Late Payments: 7 years
Bankruptcies: 7 years for completed Chapters 13, and 10 years for Chapter 7 bankruptcy cases.
Mortgage Garnishments: 7 years.
Collections: Generally, about 7 years, depending on the maturity of the debt that is being collected.
Public Record: Generally 7 years, although unpaid tax lien can remain indefinitely.
Keep in mind:
The newer these negative debts are, the more impact they will have on your score. For example, a collection from 5 months ago is going to have much more impact than a collection listed 5 years ago. With that being said, it is important to keep in mind accounts re-ages as collection companies buy your debts from original creditors and/or when an arrangement is made directly with you.
So you see a general trend here: 7 years is normal with the exception of 10 years for Chapter 7 bankruptcy. But as we said, keep in mind that not just because you have an older negative item you will be affected less, generally these accounts re-ages when not fully taken care of.
Filing Bankruptcy also has responsibilities. It is very important to keep up with Payments, avoid any more Collections, do not stop paying Student Loans, do not get behind on Taxes and keep up with Child Support payments. Doing this, your credit should slightly start to increase after 3 to 5 years after filing, but far from fully recovering.
Now, having that said, and while overwhelmed with debt, Bankruptcy is not always the answer.
Debt can also be managed through different programs that can get you results cheaper and in most cases, faster.
At Credit Services of America we specialize in Credit Repair, Student Loan Consolidation, Trade Lines and Debt Settlement. We offer very powerful tools and the system necessary to help with credit AND debt. Our services have helped thousands of customers get out of debt fast and avoiding filing for bankruptcy, giving them a fresh start a lot faster than 7 years. With an average positive credit impact of 8 to 12 months, our professional services has seen results in as little as 60 Days!!! Saving customers THOUSANDS of dollars in negative debt!
Give us a call and check us out, give yourself the opportunity to enjoy that financial and emotional relieve you well need. Schedule you FREE consultation at 844-349-8727 and start your journey to a fresh start in days, not years!
A Goal without a Plan is just a Wish. Give us a call TODAY at 844-FIX-URCR or click on the following link creditservicesofamerica.com to schedule your FREE consultation and create your personalize plan to achieve your credit and debt GOALS!
*Individual results may vary. Please call for more details and to discuss your own individual situation. We are not a law firm and can not provide legal advise.