Effects of a Bankruptcy Filing

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Your Credit Scores After Bankruptcy

Most people filing for bankruptcy have already suffered a dip in their credit scores because of their inability to pay their debts.  Bankruptcy can be viewed as a solution to the severe financial distress that you may be experiencing as a result of the inability to pay your bills.  In other words, the damage has already been done and bankruptcy is a way to fix the situation.  Once debts are discharged or reduced through bankruptcy, your debt-to-income ratio will improve and thus repair your credit over time.  If you cannot pay your debts and do not file for bankruptcy protection, late fees will pile up, interest rates will spike and your debt will continue to grow, compounding the situation further.  This scenario will undoubtedly cause credit scores to plummet further than if a bankruptcy petition was filed.

Access to Credit After Bankruptcy

A debtor might be surprised to know that credit will not completely dry up after going through bankruptcy.  In fact, lenders like credit card companies will grant you access to credit simply because you have a clean slate after bankruptcy.  Credit card companies also know that a debtor is not eligible to file for another Chapter 7 bankruptcy for eight years, which is attractive because the debtor has no recourse for another discharge.  Also, credit card companies know that in most cases the debtor is eager to rebuild their credit score after bankruptcy, making the debtor a great candidate for credit.  In some cases, debtors may even qualify for a new mortgage or loan within one or two years after a bankruptcy action is finalized.

Call Villani & DeLuca Today for a Free Initial Consultation

If you are tentative about filing for bankruptcy, call an experienced bankruptcy attorney from Villani & DeLuca, P.C. today to find out if it is right for you.  Villani & DeLuca Of Counsel attorney Robert H. Johnson has years of experience in consumer bankruptcy and can help you determine the best course of action to resolve your financial problems.  Call 732-965-3350 today for a free initial consultation.