One of the reasons people are reluctant to file for bankruptcy is the fact that the bankruptcy can remain on your credit report for up to ten years. This is a valid concern as most of us would like to be able to purchase a home or vehicle in the coming years.
If you are considering bankruptcy and you are behind or defaulting on your bills already, your credit report will reflect these issues. Delinquent payments or charge offs can stay on your credit report for up to seven years. The difference is, the phone calls and legal action threats will stop when you file for bankruptcy.
You May Still Be Offered Credit
Depending on the individual lender, sometimes, when a potential creditor sees that you have a bankruptcy on your report, they are still likely to give you credit because:
- You don’t have any other debt wanting your money
- You will not be allowed to file a Chapter 7 bankruptcy for another six years
Shortly after coming out of bankruptcy you will probably start receiving ‘get credit now’ applications. These lenders are taking advantage of the fact you may not have any other options right now, but these loans will be given at a high rate. You should be careful of these, so you do not end up where you were before your filed bankruptcy with too much debt for your income.
If you pay your bills on time and develop healthy financial habits, these will also show up on your credit report, and you will be offered better interest rates long before the ten years are up.
If you are getting negative marks on your credit report and getting phone calls and threats of legal action, contact a Dallas bankruptcy attorney to discuss how you can get a fresh financial start.