Are you overwhelmed with debt, trying to figure out what affects credit and if your credit scores are going to be dropping then worrying how to improve credit score? Are you getting harassing calls night and day, or how about at your place of work? Do your kids need school supplies and new clothes, and you’re simply worried about feeding them, and keeping them healthy? Will your utilities be shut off soon, do you get home and see that 2 or 3 day notice on your door that the water or gas is going to be shut off? Are you at your wit’s end? Are you feeling you haven’t any where to turn? I can tell you been there done that, its stressful as hell trying to figure out where to spend each dime, each nickel and penny you have, what you can do without and what you have to pay and where to get more money. Its especially tough if you got kids it just brings the whole thing to another level.
When you are drowning in debt, the enticement may be simply to throw up your hands, run away from it all, and declare bankruptcy. Some attorneys will even suggest that you do it and its so easy and all you may owe is only 10k.
Bankruptcy should only be a last option, for a number of reasons.
1. It isn’t that straightforward to start over with a clean slate any more. An impactful law called the Bankruptcy Abuse Prevention And Consumer Protection Act of 2005 makes it very difficult for individuals and couples to discharge their liabilities. They really work you over on your debt and what you can pay back.
2. It forces debtors into a debt repayment schedule that runs for at least 5 years and barely allows consumers to keep up in this period, in which the debtor must pay the vast majority of their disposable income towards a debt plan they have little control over.
3. Bankruptcy remains on one’s credit history for up to ten years. And if an employer, mortgage or auto finance company asks if you have ever declared bankruptcy, naturally you must answer truthfully.
So that means that in some ways, bankruptcy remains on your record forever.
4. Bankruptcy is not guaranteed to discharge your obligations.
For instance, you still must pay income taxes, you still have to pay child assistance, you still have to pay student loans, and there are numerous other debts that you are required to pay.
This isn’t to say that one should never consider bankruptcy under any circumstances.
You must consult with a professional bankruptcy lawyer before you do anything, though, and be totally fair about your circumstances and your prospects for revenues in the following couple of years.
You should also do your own research before you even go talk to a solicitor, so you can make the final call yourself. You must know the difference between Chapter 7 bankruptcy and Chapter 13 bankruptcy, find out exactly how long each kind of bankruptcy will remain on your credit score, and learn what kinds of liabilities you’ll continue paying. You need to get a pragmatic view of what your life will be like after you filedeclare Chapter 7 bankruptcy.
Chapter seven fundamentally means handing over all property not exempted from insolvency cases so it can be sold off to repay yourdebts. There is not any repayment agreement. It stays on your credit history for up to 10 years and nowadays, with the new bankruptcy laws, many people who aren’t earning that much money find that their income is too high to qualify for this option when taking the Means Test.
Chapter thirteen requires a repayment plan and stays on your credit score for 10 years, though it is often removed after seven years.
Before you’re making a call that will have an impact on your life and your credit for years to come, do your research, find out whether or not it is worth filingdeclaring bankruptcy, and consider what your other options may be, such as making an attempt to come up with your own liability payoff plan – one that you have control over. Other options might include a short sale of your house, a mortgage modification, selling off assets, public assistance, and others.
The importance of your score will become very apparent when you apply for a loan whether it be to buy a home or a car loan. Even credit cards will charge someone double the amount of interest to someone with bad credit vs someone with good credit. If you want to have your dream home within reach and an affordable car loan best thing is to keep your credit score healthy. If your score is not at its best then the best thing to do is to get your score up you just need to do the work and learn the systems. What ever system you use to show you how to improve credit score keep in mind it well require you to learn a few things and require work on your part but it is do able, and learning what affects credit can be a reality for you if you are willing to learn and do some work.