Friday, December 28, 2012

What Does Bankruptcy Do To Your Credit Score?

What Does Bankruptcy Do To Your Credit Score?

Bankruptcy reduces balances due to zero on your credit report.  However bankruptcy does not remove a creditor from your credit report and it does not remove the history of missed payments. If you’re looking to remove a creditor from your credit report you can simply wait for them to drop off or file a valid dispute with the credit bureaus.  The most important effect of bankruptcy on your credit report is that it removes your obligation to repay past debts, and that allows you to start rebuilding your credit.

Your credit score will drop after you file for bankruptcy, however your credit score will usually go back up shortly after the bankruptcy is filed because your debt to credit ratio improves.  You will also start to get offers for credit cards and other loans after you file.  When reestablishing credit make sure that the secured credit card reports to the credit bureaus and to have a plan of action to keep your debt under your control. 

I Don’t Want My Credit Score to Drop, Should I File Bankruptcy?
If you are missing payments, then your credit score is decreasing and won’t stop until something is done about it.  If you have trouble paying your bills each month and have no savings, then one large unexpected expense can put you in serious financial jeopardy.

If you cannot pay down your debt and don’t have any savings, then bankruptcy is an option for getting a new start on your financial life. Call King and King at 404-524-6400 for a free bankruptcy consultation today.
Follow King and King Attorneys