Sometimes good people make bad decisions when it comes to money, although in some cases, it really is not their fault. Before long, they owe more than they are able to pay. This means that they start making late payments, or start missing payments altogether. Before they know it, their credit score has taken a nose dive, and higher interest rates dig the hole they are in even deeper. If you have found yourself in this situation, what you may not know is that you actually may be able to improve your credit score and qualify for better rates by actually filing Chapter 7 bankruptcy.
Benefits Of Filing Chapter 7 Bankruptcy
Contrary to what you have been taught, there are actually quite a few benefits to filing Chapter 7 bankruptcy. Not only is it the most simple, and easiest bankruptcy to file, it allows you to start your financial life over again. This is not all, there are numerous other benefits, which come along with this action.
- Filing bankruptcy reduces the amount of financial stress you find yourself under. When you are under an undue amount of stress it affects every aspect of your life, including your family, your job, and your health.
- Filing bankruptcy frees up time and allows you to focus on making money. You no longer have to figure out how to borrow money from point A to pay point B. The money you make can now be used to do the things you want and need to do.
- After you file bankruptcy, you will have a peace of mind. You no longer have to worry about lying awake at night worried about your financial situation.
- After you file bankruptcy, you will not longer have to pick and choose the telephone calls you answer, unless you are simply trying to avoid your mother-in-law.
Best of all, even though you have a bankruptcy filing on your credit, all other negative credit issues will be wiped clean once you file bankruptcy. This means that you literally will be able to have a fresh start, and depending on your credit situation prior to filing, it may actually improve your ability to have a good credit score.
How Filing Bankruptcy Can Improve Your Credit
What many people may not realize is prior to filing bankruptcy, you probably had numerous negatives on your credit report, which all were ticking on different clocks. While one late pay report may have been getting ready to expire, you may have had others that would affect your credit for years to come. When you have staggered time periods scattered throughout your credit report, it makes it difficult to rebuild your credit.
When you file bankruptcy all of these negative reports go away, and you will start rebuilding your credit immediately. If you use sound financial judgement, everything from your date of discharge forward will be a positive entry into your report. Positive entries include:
- Payments being made on time
- Low account balances
- The amount of time you have successfully managed the account, and more
The more positive entries you have, the easier it is to offset the fact that you have filed bankruptcy, and the higher your credit score.
You may be thinking that with a bankruptcy, you will not have to make any payments, but this is not always true. You may not choose to discharge all your debt in bankruptcy, or you may choose to incur a small amount of debt to help rebuild your credit. Sometimes having no credit is worse than having bad credit.
Each situation and case is different. If you would like to see how filing Chapter 7 bankruptcy can help you improve your credit score, click here to read more or speak with an attorney who specializes in bankruptcy filings. They will be able to answer all of your questions, and get you started on your way.