 |
 |
|
Will Filing Bankruptcy Ruin My Credit? |
| By: Peter Jacoby |
| |
Many people considering filing bankruptcy ask "Will Bankruptcy Ruin My Credit?". Myths surrounding bankruptcy and credit reports fly around the internet faster than the latest celebrity gossip. What are the real ramifications to your credit if you file bankruptcy? What will bankruptcy do to your credit?
When you file bankruptcy, the bankruptcy filing is reported to your credit report. The credit report agencies list a bankruptcy filing on your credit report for up to 10 years. Why?
Your credit report is supposed to be an accurate depiction of your credit history and filing bankruptcy impacts your credit in many ways, surprisingly, many of them positive.
Many people considering filing bankruptcy think a bankruptcy will stay on their credit report for up to seven years. In fact, bankruptcy can stay on your credit report for up to 10 years. Where do people get the 7 year time period? Under the old bankruptcy law, a debtor could not file two successive chapter 7 bankruptcy in a 7 year period, this is probably where people came up with the 7 year time period.
The actual effects of bankruptcy on your credit may be much shorter than the 10 year time period. Many people are shocked to find credit card offers flooding their mailbox shortly after they file bankruptcy. Why would someone extend credit to a debtor who has filed bankruptcy? As Marlon Brando once said in the Godfather "It's business."
Creditors do not make money if they don't lend money, it's that simple. Savvy creditors know that once a debtor files a chapter 7 bankruptcy, they are unable to file another chapter 7 bankruptcy for 8 more years (under the new bankruptcy law). If a debtor decides to file a chapter 13 bankruptcy, chances are good the creditor will be paid back through the court ordered repayment plan. |
|
|
| |
| |
| |
| |
| Peter Jacoby writes for the bankruptcy articles for the Legal Help Online network. |
|
Featured Bankruptcy News
Warning: include(/home/bp/public_html/rsse/rss.php) [function.include]: failed to open stream: No such file or directory in /home/bp/public_html/bankruptcy-articles/Will-Filing-Bankruptcy-Ruin-My-Credit.php on line 89
Warning: include() [function.include]: Failed opening '/home/bp/public_html/rsse/rss.php' for inclusion (include_path='.:/usr/lib/php:/usr/local/lib/php') in /home/bp/public_html/bankruptcy-articles/Will-Filing-Bankruptcy-Ruin-My-Credit.php on line 89
|
|
|
|
 |
