How Chapter 13 Bankruptcy Can Help
Bankruptcy has a long-lasting impact on a person’s credit rating and on his or her ability to obtain credit in the future. The impact is not entirely negative. In some cases, filing bankruptcy may actually improve a bad credit rating, though. In addition, there are a number of steps a person can take to improve his or her credit after bankruptcy. An experienced bankruptcy attorney at Mark T. Young & Associates in Hixson, Tennessee, can offer valuable advice about how credit can be improved after a bankruptcy, and how to work for a better financial future.
Discharge Results In An Improved Debt-To-Income Ratio
Most of the debtors who consider filing bankruptcy already have poor credit histories. Their credit ratings have suffered because of slow payments, late payments, repossessions, extended credit, charge-offs, foreclosures or judgments. After their bankruptcy, however, the discharged debts will no longer count against their income, so their credit may be better after the discharge than it was before. In addition, while a bankruptcy case will remain on an individual’s credit report for up to ten years; late payments stay on for up to seven years, so the effects are similar. Bankruptcy, however, gives consumers a chance to improve their credit faster because they will have an improved debt-to-income ratio after discharge.
Still another way to re-establish credit after a bankruptcy is to obtain a loan with a co-signor whose positive credit convinces the bank or other lender that the loan is a safe bet. As payments are made on the cosigned loan, the positive credit history affects both borrowers.
One “credit repair” method to avoid after bankruptcy is seeking help from an unscrupulous “credit-repair service.” Many consumers pay substantial sums of money to so-called “credit clinics” to “fix” their credit reports when, in actuality, only time can improve bad credit. A credit repair service or clinic can legally do nothing that a consumer cannot do on his or her own, for free.
Speak With A Bankruptcy Lawyer
A lawyer experienced in bankruptcy law at Mark T. Young & Associates in Hixson, Tennessee, is in a strong position to advise consumers before and during the bankruptcy process.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.