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The Myths about Bankruptcy


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10/9/2017
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Bankruptcy can damage your credit. You can minimize the effect bankruptcy can have on your credit score by being aware of these five myths:

1. Myth: 

If you have no negative information on your credit report, you will have a higher post-bankruptcy credit score.

Fact:

Having a positive credit score prior to bankruptcy does not guarantee that you will have a better score post-bankruptcy. The strongest determining factors are: how long bankruptcy information has been on your credit report and the length of the time it first appeared to present day.

2. Myth:

Bankruptcy stays on your credit report for ten years.

Fact:

Chapter 7 bankruptcy remains on public records for ten years. Other bankruptcy reports such as, "account included in bankruptcy," debt collectors, and Chapter 13 only remain on your credit report and public records for seven years.

3. Myth:

Your score will be low while your bankruptcy information remains on your credit report.

Fact:

You cannot expect to have a high credit score after bankruptcy, however, if you manage your credit correctly, within 4-5 years, you can have a score of 700 or higher.

4. Myth:

Bankruptcy will impact everyone in similar ways, regardless of the amount of debt they owe creditors.

Fact: 

Several factors go into credit scoring factors such as the significance of the bankruptcy, the amount of debt, and the ratio of negative to positive accounts from past credit reports. No one is impacted by bankruptcy in the same way.

5. Myth:

Your credit history regarding bankruptcy will be eliminated once your bankruptcy case is over.

Fact:

Bankruptcy will show up on your credit report for 7 to 10 years after your case has been closed.

If you are facing bankruptcy, consider consulting with an attorney. You can contact Raleigh based, bankruptcy lawyer, Brent Adams and Associates by clicking here or by calling the toll free number 877-273-6823.



Category: Bankruptcy Attorneys


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