This is an advertisement
Robinson Salyers, PLLC
Call Us For A Free Phone Consultation
502-220-4439

This is an advertisement

Call Us For A Free Phone Consultation502-220-4439

Reestablishing credit after bankruptcy

Kentucky residents who are struggling to pay their bills are sometimes reluctant to explore their debt relief options because they worry about what would happen to their credit ratings if they filed for personal bankruptcy. While discharged bankruptcies can remain on Experian, Equifax and TransUnion reports for up to 10 years, research suggests that they do not greatly affect credit scores or deter lenders. The financial services sector also has a number of borrowing options for available for consumers who are seeking to rebuild their credit ratings.

When lenders see discharged bankruptcies, they know that consumers are no longer obligated to pay certain debts. Individuals who have filed for Chapter 7 or Chapter 13 bankruptcy also tend to borrow cautiously and know that they must wait a period of time before they are able to file again. Consumers can start to rebuild their credit ratings by taking out secured loans or getting secured credit cards. They should also obtain copies of their credit reports and check to make sure that they are free of errors.

The impact that filing a personal bankruptcy has on credit has been studied by the Federal Reserve Bank of Philadelphia. The researchers looked at what happened to the Equifax credit scores of individuals who filed Chapter 7 bankruptcies in 2010, and they found that their scores increased from an average of 538 when their bankruptcies were filed to an average of 620 when they were discharged about six months later.

Attorneys with experience in this area will likely have encountered individuals or families who chose to endure unmanageable financial situations due to concerns over credit. Attorneys could seek to calm these fears by explaining that the nation's bankruptcy laws were written to provide the possibility of a fresh start.

Source: Nerdwallet, "When Bankruptcy Is the Best Option", Liz Weston, May 23, 2016

No Comments

Leave a comment
Comment Information
Take Action – Contact us Now

Contact Our Firm

Main Office
909 Main Street
Shelbyville, KY 40065

Phone: 502-220-4439
Fax: 502-633-6762
Map & Directions

McClure Building
306 East Main Street
Suite 605
Frankfort, KY 40601

Phone: 502-220-4439
Map & Directions

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy