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Eric L. Bolves, Esq. |
HOW WILL MY CREDIT BE AFFECTED?The first thing to keep in mind is that your credit report is a historical record of your financial past. One thing you can't do is change history. When you file bankruptcy your bad credit is not automatically erased from your credit report. It can stay on your report for up to 10 years. Frequently creditors will change their credit report listing to say "Account included in Bankruptcy" and will delete all other information. Anyone who knows how to read credit reports will see when the bankruptcy took place and they will know that the old bad debts no longer count. That means you don't have a lot of outstanding debt. When you apply for credit, the first thing they ask you is how much you earn and how much you owe. This is your "debt to income ratio". This tells a future creditors if you can afford to pay for the debt you have. Right now your debt to income ratio is very much against you. After the bankruptcy it will be much better because you have little or no debt at all. Not only that, you can't file chapter 7 again for at least 6 years which means you are a better credit risk after the bankruptcy. This does not mean that everyone will want to give you credit again. Some companies just won't. You will have prove yourself again. You can do this by doing a good job of paying the creditors you decided to keep like your mortgage, your auto loan and maybe a department store credit card. Many people find that filing bankruptcy can be the first step in cleaning up their finances and re establishing their credit. Return To Main MenuOffice Consultation Area
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