Managing personal finances and keeping on a budget doesn’t seem to be getting any easier. You are being constantly bombarded by “special offers”, “BOGO” deals, and flash sales trying to get you to use that last dollar of the credit limit left on your card. As your debt skyrockets, your credit score falls. Somewhere down the road, you wake up and realize there is no way to dig yourself out of the financial hole you got yourself into. When you get to the point of wishing you could get a fresh start to do it right next time, it’s time to consult an attorney about filing for Chapter 7 bankruptcy.
What Is Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy filing is intended to help the debtor ease an unmanageable debt load and have a chance at that fresh start. With that in mind, Chapter 7 bankruptcy is usually considered a last resort to fix a broken financial situation. Debt counseling can sometimes help by showing a way out of the situation short of a bankruptcy filing. However, if you are worried about creditors trying to garnish your wages or have reached the point where the only way you can make a payment on one credit card is to get a cash advance on another, it may be time for Chapter 7 bankruptcy.
Bankruptcy and Your Credit Score
Bankruptcy and your credit score – how does one affect the other? Initially, right after filing the paperwork for a Chapter 7 bankruptcy, the filer’s credit score usually goes lower. However, the decrease in the score is often not as much as filers often fear, and the decrease may not last as long as expected either. There are many reasons why.
For starters, if you have a lot of credit card debt and are making no or below minimum payments on one or more of the cards, your credit rating has probably already taken a big hit and can’t get much worse. In addition, as you proceed through the bankruptcy process, those debts that are now being shown as in default or delinquent will be liquidated and no longer appear on your credit report. As those debts “disappear” an improved credit score will result.
Bankruptcy Can Raise Your Credit Score
So, bankruptcy can raise your credit score? In the short run, perhaps not. In the long term, yes, but that is up to you and the decisions you make going forward. After bankruptcy, you must develop a budget that you can live on without the need for carrying credit card debt. Next, to improve your credit score going forward, you should attempt to establish new credit after the bankruptcy proceeding has been completed. The effort should be on a small scale, perhaps applying for a department store type card. Wait a few months after Chapter 7 has completed and be persistent in your efforts.
Consult a Bankruptcy Attorney Expert – Patrick Cordero P.A. Law
If debts have gotten out of hand and you believe it is time to consider Chapter 7 bankruptcy, consult one of the bankruptcy attorney experts at the law offices of Patrick L Cordero P.A. to get the legal representation you need. One of the experienced bankruptcy lawyers can assist you with the ins and outs of these complex laws and help you sort through the plethora of factors that need to be reviewed. Call today for a free consultation at 305-330-3805.