Will Filing Bankruptcy Ruin Your Credit?

One of the misconceptions about filing bankruptcy is the belief that it will destroy the filer's credit. The truth is filing bankruptcy often will improve a persons credit and certainly, in the long run, be very beneficial to your credit score. Typically the bankruptcy filer will already have bad credit. Credit cards, medical bills, and installments loans are often behind or the debtor has quit making payments altogether. If nothing is done his credit will not improve for at least 10 years, and often longer since the ten years that adverse credit can remain on a credit report only starts when the customer quits making payments. Bankruptcy, however, often will be the beginning of a healing process. After much of a person's debt has been discharged, the person becomes a much better credit risk and his or her credit score will begin to improve, assuming the person is employed and doesn't run up a bunch of new debt after the bankruptcy.

This improvement in the bankruptcy filer's credit will only happen, however, if the creditors properly report the debtor's credit. Unfortunately, often this isn't the case. It's important to check your credit after bankruptcy to be sure the debt is listed as "discharged in bankruptcy" and a balance of "zero." If this isn't the case not only will the adverse impact of a bankruptcy be on your credit, but also all of your old blemishes that should have been removed. A consumer can dispute adverse credit themselves, but often creditors don't correct the adverse reporting. Your best bet is get professional help in the beginning. This shouldn't cost you any money as the law provides that attorney's fees are recoverable if it becomes necessary to sue a credit to force compliance with the credit laws. Visit our website at http://protectyourfreshstart.com for more information.