It helps because you are removing negative items from your credit report. The bankruptcy itself does have a negative impact, but it’s indirectly positive if you have tons of debts that are overdue, those are really hampering your credit report, obviously those are the things that are really pulling your score down is having certain debts that are months behind and having multiple entries of default.
When you file bankruptcy and those debts are cleared off and they’re discharged, those things are removed from your credit report. It’s like addition by subtraction. You have got the bankruptcy on their share and that hurts but you’ve also got all of the help that you get from getting all the bad stuff out of that.
What Are Some Tips That You Might Offer Your Clients When You Are Talking About Credit Repair?
I don’t personally do any kind of credit counseling for people that haven’t filed bankruptcy. But I do discuss credit and credit reports with my clients and if they are having trouble with a creditor after they filed bankruptcy, I have helped the clients with that. I generally do that as part of my services when it comes up. I usually don’t charge anything extra, I consider that part of the bankruptcy process, and it falls in line with the flat fee.
It usually involves making sure that creditors have received notice to the bankruptcy and keeping up with them, if they haven’t cleared the balance out or if they haven’t reported to credit agency or something like that, then I would contact them and make sure that they fix whatever problem it is, and that’s usually all you really need to do in bankruptcy. It’s pretty rare to have problems that extend beyond that.
Is There Anything You Would Like To Add About Repairing Credit After Bankruptcy?
Yes. Filing bankruptcy is something that has a stigma and there are a couple of reasons for that stigma but one of the reasons is that your creditors don’t want you to do it and particularly big creditors like credit card companies. They don’t want you to file bankruptcy because it costs them money, but the thing is they know that there are risks when they lend people money and they understand that on the grand scale that they’re offering on that certain people are going to file bankruptcy and it’s a number scheme to them, and it should be a number scheme to you too.
If you are in a situation where bankruptcy can help out your personal finance and it can get you back on track, then you shouldn’t be worried about stigmas that exists that are serving to creditors; you should be concerned with getting yourself back on track and you shouldn’t let that stop you from considering bankruptcy. All it takes really is a consultation with the bankruptcy attorney to kind of talk about your situation and get some of those mystery of that and find out the real benefits that it can give you and to find out some of the consequences as well.
So, it doesn’t hurt to investigate it, but investigate it the right way and talk to somebody that you trust. Don’t rely on a lot of myths or misinformation from people that aren’t attorneys or don’t know much about bankruptcy.
Should the Negative Impact on Credit Score Hamper Someone from Filing Bankruptcy?
No. It really shouldn’t because a lot of people are hyper-concerned with their credit score and that may be warranted but when you are in a situation where you are defaulting on debts and things like that, then yes, there are more important things. First of all, getting out of debt, getting yourself back on track, getting away from all that stress is more important than a credit score that can be fixed over time.
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