Bankruptcy and Your Credit Report
If bankruptcy is unavoidable, you can file either a Chapter 7 bankruptcy, also known as a “liquidation bankruptcy,” or a Chapter 13 bankruptcy, also known as a “reorganization bankruptcy.” Chapter 7 will allow you to discharge your debt, while Chapter 13 provides a way to repay your debts using a negotiated repayment plan.
Will Bankruptcy Affect Your Credit History Adversely?
Filing for bankruptcy will stop creditors from trying to collect the debts you owe, but WILL NOT give you a clean financial slate. Bankruptcy will seriously affect your credit report and credit worthiness. Consequently, obtaining a loan or line of credit in the future will be extremely difficult.
If you do nothing to remove bankruptcy from your credit report, it will remain for 10 years. You might try rebuilding your credit score, which will instantly drop hundreds of points, but this is hard when nobody wants to offer you credit.
Any credit company will view a person with a bankruptcy as a potential financial liability. For this reason you might consider repairing your credit.
Taking immediate action to rebuild your credit can go a long way in boosting your credit score and will alleviate the worry of waiting 10 years for your bankruptcy to clear on your credit report. Choosing to rebuild your credit is a smart decision which can lead to approval of home loans and loans for other major purchases, such as home remodels or a new car, sooner.
Rebuild Your Credit Legally
It IS legal to contest inaccurate information contained on your credit report. The Fair Credit Reporting Act (FCRA) allows you to contest any information which, in your opinion, is inaccurate.
When creditors and credit bureaus receive a dispute letter from you, the FCRA requires that they investigate and verify the accuracy of the entry. If the entry cannot be verified, the negative entry must be removed.
Expert advice can be invaluable if you decide to pursue rebuilding your credit. Lexington Law’s legal professionals can guide and assist you in your attempt to remove negative entries. Consider contacting Lexington Law to get the assistance you need to clean up negative entries on your credit report.
We raised our credit scores from the upper 500 range to 745 and 763 in under six months and got approved for our dream home. See proof of our credit repair success at www.creditforcouples.com and get the real truth about lexington law.
Posted under Credit
This post was written by Casey Deanwater on January 8, 2010
