You are getting 2 completely different concepts confused with each other. You are getting the fact that bankruptcy is reported on your credit report for up to 10 years mixed up with the effect that reporting will have on your credit. Just because something is reported on your credit report does NOT necessarily mean it will have a negative effect on your credit standing.
First, let's get one thing out in the open. By the time you need to make an appointment to see a bankruptcy attorney, your credit is already messed up or maxed out…or both…or at least strongly headed in that direction. Think about it. If your credit is already messed up or maxed out, you…more than likely…have no credit for bankruptcy to hurt.
Furthermore, as I’ve previously mentioned, in my experience if you have not re-established good credit in 2 to 4 years after you file bankruptcy, it most likely has nothing to do with the fact that you filed bankruptcy. And it certainly has absolutely nothing to do with the fact that your credit history still shows an old bankruptcy filing.
Now...the really big news!
It's the opposite of what most people think. Most people think bankruptcy will hurt their credit...and if you had "great" credit...that would be true.
But...with all due deference and respect...you wouldn't be reading this if you had "great" credit...or if you could pay ALL your bills. And...even if you still have some credit...not being able to pay ALL your bills on time will kill whatever credit you still have.
For most people...the truth is..."FILING BANKRUPTCY ACTUALLY HELPS RE-BUILD CREDIT...AND HELPS INCREASE "CREDIT SCORES"!"
It's true. Why? Because the first step in re-building credit and getting a higher "credit score" is always the same. You have to get rid of some debt. Nobody is going to lend you more money or give you more credit until you get rid of enough debt to make sure you can handle another loan or more credit...and make the payments.
Getting rid of debt is bankruptcy does best. It's the "big thing" bankruptcy does. Bankruptcy gets rid of debt...debts like credit cards, medical bills, repo debts, foreclosure debts and so on*...and getting rid of debt makes you look better for the purpose of getting future loans and credit. It's that simple. * How much debt you can get rid of will depend upon the facts of your particular situation.
Think about it. What else...in the world...besides bankruptcy...let's you get rid of debt without having to pay it?
The answer is that the bankruptcy laws "rip up" contracts....and when you "rip up" contracts...the contract obligation is gone...for good, finally and forever.
And this applies to credit cards too. Whether you realize it or not...credit cards are just another form of contract. Remember that box you "checked" when you applied for your credit cards? That was the contract. Filing bankruptcy "rips up" credit card contracts too.
And.."ripping up" contracts gets rid of debt. So...want good credit? Want a higher "credit score"? Start by getting rid of some debt...and to do this...start by filing bankruptcy!
Debts Hurt! Got debt? Need help? Get started below!
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