HOW BANKRUPTCY STOPS BAD CREDIT

Your credit report shows how you have paid your bills up to this point. If you’re considering bankruptcy as a means of getting control of your financial situation, then you most likely do not have good credit. But, there’s some good news that we go over in a free initial consultation. (By the way, if you want to see how bankruptcy can help you, then call me at 210-930-7000 to schedule a free Initial Consultation.)

The first point that you need to realize is that there is not a lot of difference between BOTTOM and ROCK BOTTOM! What does that mean? Chances are your credit is hurt pretty bad at this point. And, if you do nothing, your credit history will continue to get worse, not better. If your credit continues to get worse, then there may no be much difference when comparing that to the initial impact of filing bankruptcy.

The next point is that the filing of the bankruptcy case is like a line drawn in the sand. Sure your credit report is going to show that you filed, but if you successfully complete your bankruptcy case, it will also show that you no longer owe all the dischargeable debts that you incurred before the line was drawn in the sand. At that point, your credit report starts looking much better than if you did nothing. Want proof? Just think about who looks better when they apply for credit, such as a car loan. Someone with lots of debts that are not paid, or someone who is debt free? Who has more money available for the new car payment? Someone who has lots of unpaid debts, or someone who is debt free?

Now, getting debt free is just one step in rebuilding your credit. So, what can you do to improve your CREDIT WORTHINESS after filing bankruptcy?

1. The First Step Is To Go Slow. Many people do not realize that they will be sent several “pre-approved” credit offers after they complete their bankruptcy case. Why? Because someone who is debt free is considered to be a much better candidate for new credit.
2. The Next Thing Is To Manage Your Finances Well. Your credit score before filing bankruptcy is measured against the general population, whereas people that file bankruptcy are only measured against other people that have filed bankruptcy. So, if you manage your finances well, your credit score will increase faster than if you try to take care of your situation outside of bankruptcy. For more information on this point, read this book: The Ultimate Credit Handbook, by Gerri Detweiler, president, Ultimate Credit Solutions, Inc., Sarasota, Florida.
3. The Next Step Is To Increase Your Income And Save Money. “Cash is King” in the world of credit, and there’s nothing that improves a person’s credit worthiness like cash. To prove it, go apply for a car loan and let them know how much cash you have for a down payment. The more cash you have for a down payment, the better you look. I had a brother that filed bankruptcy as a result of a business downturn. He later went to purchase a vehicle, and asked the salesman if the dealership would provide financing. The dealer asked about my brother’s credit, and he said that he filed bankruptcy a while back. The salesman said that they could not provide financing because of the bankruptcy. After my brother told the salesman that he would pay a 50% down-payment, the salesman said that not only would they arrange financing, but that they don’t even look at your credit with a down payment that large. As one car dealer ad says: “Nothing cleans up bad credit like a nice tax refund!” Remember, CASH IS KING in the world of credit, so increase your income and save it if you want to increase your credit worthiness.

Here’s another great example of how bankruptcy improves your credit worthiness: I had a receptionist that filed bankruptcy before she came to work for me. Within a year of filing bankruptcy, she and her husband bought a house and a truck. Now, if bankruptcy destroys your credit worthiness rather than improves your credit worthiness, then how was my receptionist and her husband able to purchase a new house and new truck within a year after filing bankruptcy?

We discuss this…and more…with you when you come in for a FREE Initial Consultation. Call us at 210-930-7000 to schedule your free consultation.

You can go a long way toward protecting your family, your job, your reputation, and your future credit…but only if you get good, sound legal advice…before things get worse.

There are numerous ways to deal with your debts and we can’t go over your specific situation here, but in a Free Debt Consultation we are able to answer all your debt questions and show you all your options.

Just to give you a taste of what we can do: We can consolidate bills for as little as $125 per month. That’s all your medical bills, all your credit cards and all your personal loans for as little as $125 per month.

Pay what you can afford and be done with it!

Remember, I can’t help you until you call.

Call 210-930-7000 today to schedule your Free Debt Consultation.

WANT TO LEARN MORE?

Want to learn more about our debt consolidation plan with payments as low as $125 per month? (click here)

Want to find out how to re-build credit after bankruptcy? (click here)

Want more information about credit? Click on any of the following:

Want Good Credit: Think Bankruptcy

Your Credit Score: How It’s Determined and How Bankruptcy Affects It

Want More Info About Bankruptcy? (click here)