Many people have a negative perception of bankruptcy, but this perception is often due to a seemingly never-ending stream of misinformation about bankruptcy. Such misinformation paints bankruptcy in an unfortunate light, but for all of the good that debt relief can bring to someone’s life, any stigma about filing for bankruptcy is undeserved.
If you think bankruptcy is solely a bad thing, chances are you’ve been affected by at least one of these common bankruptcy myths. Keep reading as we discuss three of them and why they’re wrong.
Myth 1: Bankruptcy Will Forever Wreck My Credit Score
A very common myth about bankruptcy is that it will permanently impact the filer’s credit report and lower their credit score. The fear here is that such consequences can make it difficult or impossible to ever obtain credit again – but this just isn’t so.
At most, bankruptcy will show up on your credit report for 10 years. After that, it’ll fall off of your report and the financial hardship you’re experiencing now can be a distant memory. We won’t pretend that 10 years isn’t a long time, but if you start rebuilding your credit as soon as possible after bankruptcy, you can repair your credit score enough to qualify for credit despite bankruptcy showing up on your report.
Most of our clients, so long as they are doing as advised, have a credit score of 650-700+ within two years of their bankruptcy discharge.
Myth 2: No Lender Will Offer Credit After Bankruptcy
This myth dovetails with the previous myth. While many people fear that a recent bankruptcy will make it impossible for them to get enough credit to begin rebuilding their credit score, the opposite is often true. Once you start doing your research, you might be surprised to see how many creditors are willing to work with customers who just exited bankruptcy and have diminished credit scores as a result.
Surprising as that sounds, most credit card companies view you as a perfect candidate to lend to. For instance, if you have just received a discharge in a Chapter 7 bankruptcy, credit lending companies know that you have no unsecured debt and you are not able to file another Ch. 7 for at least eight years.
You can get a credit card, auto loan, and even a mortgage after bankruptcy. The options may not be as bountiful as they would be if you didn’t have a bankruptcy in your past, but they’re certainly out there. Just remember to stay on top of any new financial obligations you take on to rebuild a good credit score!
Myth 3: Bankruptcy Will Ruin My Family
Financial hardship can cause a lot of strife in families, sometimes even bringing marriages to the brink of divorce. While many think that bankruptcy will signal the end of it all, it can actually offer a new beginning for families to rebuild their financial lives with stability in mind.
Once you and your spouse can worry less about debt, you can focus more on each other and what’s really important in life. We at Buchalter & Pelphrey Attorneys At Law see many clients who are worried about how bankruptcy will impact their lives going forward. For many of our clients, we’ve seen their happiness and quality of life improve after getting important debt relief.
If you’d like to explore options to get out of debt through bankruptcy, contact Buchalter & Pelphrey Attorneys At Law online now.