Credit Card Lawyer
An attorney knows that it’s not the end of the world if someone has to file for bankruptcy. In fact, bankruptcy can be an effective way for a person to get themselves out of a severe financial rut over the course of time. Despite what many people think about bankruptcy, being approved to operate under a certain chapter doesn’t necessarily mean all of your debts go away.
For many, they still have to pay back at least a large chunk of their debts. But, the difference is that they are able to do so by getting a structured payment plan based on how much they make and a reorganization of their finances, instead of trying to slowly chip away at their debts on their own.
Here we have gone into further detail about how you can improve your credit score after a bankruptcy status:
The Credit Score
An attorney understands that not everyone is proud of their credit score. When they look at it, they may feel as though they have failed or are embarrassed about their ranking. Credit scores can take even more of a hit after a bankruptcy filing. However, it is imperative to remember that this is only temporary. Credit scores can be changed and increase with a little strategic thinking and dedication. So even if your credit score took a serious plummet, there is a way out!
Factors that can influence your credit score include:
- What percentage of your credit limit is used
- How long you have had a line of credit
- How many lines of credit you have (loans, credit cards, etc.)
- Whether you have paid your minimum payments consistently and on-time
- The diversity of your debts (mortgage, car loan, student loan, credit cards)
Bankruptcy Doesn’t Eliminate All Debt
Bankruptcy doesn’t mean that the entirety of your debts are completely forgiven. Some debts may be eliminated but it depends on what bankruptcy chapter you operate under. For instance, if you file for Chapter 7 bankruptcy but want to keep the car you have now on loan, it will be required that you continue submitting payments to the appropriate credit agency. An attorney may suggest this scenario so you can build your credit score back up, but only if you make these payments on-time. Depending on your circumstances, they can let you know which bankruptcy chapter is most suitable for you to apply for:
- Chapter 9 (for municipalities)
- Chapter 11 (reorganization for businesses and individuals)
- Chapter 12 (family farmers and fishermen)
- Chapter 13 (wage earner plan)
- Chapter 15 (debts that involve more than one country)
If you are considering applying for bankruptcy, now is the time to get advice from a legal professional. The more time you wait, the more your debts may add up. We can understand that accepting you need to file for bankruptcy can be a difficult one to digest, but please know that this may be the key to finding the financial stability you have been looking for. Contact a credit card lawyer in Clearwater, FL today for details.
Thanks to The Law Office of Michael A. Ziegler, P.L. for their insight into bankruptcy law and strategies to improve your credit score.