Life After Bankruptcy

Filing Bankruptcy will drop your credit score. This is the major reprecussion why people try to avoid it. If you have a great credit score it will drop it about 200 points or so which will affect your ability to get credit in the “near” future. Many of my client already have low credit scores or have missed mortgage payments, credit card payments, have judgments and other things that are already affecting their scores. Don’t let the fear of a low score stop you from filing. Credit will come. If you reaffirm your home or car and keep paying on it, that will help prove you are credit worthy. Many lenders send out credit offers to recently filed bankrputcy debtors since they no longer have debt and can’t file for another 8 years. I would say that I have seen clients after 3 years regain credit scores in the low 700’s and qualify for conventional mortgages. You just need to rethink how you use credit and be sure to pay it back quicker and at higher percentages then you were before you file. Bankruptcy can feel like a life altering choice but I have found that it is typically for the better and a fresh start is much better then sitting in the quagmire or debt and not making the difficult but appropriate decisions. Companies file for Bankruptcy for the same reasons that people do but people forget that the process is for emerging in better shape and not giving up.

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