How bankruptcy affects your credit report?

When you hear the forbidden word bankruptcy you usually run. Bankruptcy has been linked with the end of your credit worthiness. People will do anything to prevent bankruptcy; even getting further into debt. But is bankruptcy really that bad to your credit? What will your credit report look like after bankruptcy?

Here is the real deal: depending on your situation, bankruptcy may be the solution for you. That’s right. I am not saying that you should file for bankruptcy tomorrow, but in some cases avoiding bankruptcy you may be hurting your credit more. If you are in a really tough situation; where you have credit card bills and you are behind it, you have several late payments on your house or your house is being foreclosure, you are late on your car payments or you had your car repossessed and you have a bunch of charge offs in your credit then you be way better off filing for bankruptcy. Bankruptcy will give you a clean slate and room to breath to start rebuilding your credit. Let’s face it, your credit is bad as a just mentioned bankruptcy is the only solution for you. But not just bankruptcy alone; bankruptcy and credit repair.

As soon as your bankruptcy is clear, you want to start working on your credit report. And no, you don’t have to wait for 7 years. If you start fixing your credit report right after your bankruptcy you will see real improvement on your credit report as early as two years. Will you have perfect credit 2 years after your bankruptcy? No. but your credit will be decent enough to buy a car and a house. But if you are in this situation I recommend you work with a credit repair agency. Why? Because this is a complicated process, specially after a bankruptcy, you don’t want to send poor dispute letters to the credit bureau, you will need the expertise of a credit repair agency. If you feel comfortable with your dispute letters to the credit bureau, by all means try it. But believe me shedding $80 a month to an experienced credit repair agency in this case is well worth it.

But this case scenario is not for all bad credits. If you have just minor items like, few late payments on your credit repair, or a one charge off or two, you want to consider paying these accounts and repair your credit. This option, is only for those of you who have your credit beyond repair. My brother in law, had a foreclose, a car repossessed, 4 credit cards all over the limit and late payments and three charge offs. He filed for bankruptcy and started cleaning his credit, within the year he was able to purchase a car with good interest rates and in two years from his filing he bought a house. Foreclosure do not necessarily means the end to your credit report, it might just mean a new beginning.

For more information on Bankruptcy, please visit this very informative site: Bankruptcy in Florida