Consult a Denver Bankruptcy Law Firm for Expert Bankruptcy Guidance
The narrative around filing for bankruptcy can be that it means doom and gloom for your financial life. That your credit will never recover. That you’ll never be able to get a credit card or a house or car again.
Of course, that simply isn’t true.
Banks and other financial institutions often push this frightening idea, scaring customers and making them think bankruptcy should be avoided at all costs (no pun intended).
While, yes, bankruptcy is a serious decision and shouldn’t be taken lightly, filing for bankruptcy can actually be a much smarter, cheaper way to get your financial life back on track.
Before making any decision as important as this one, it’s essential you consult a respected law firm, such as Denver bankruptcy attorneys Wink & Wink. They’ll provide a free consultation and see if bankruptcy is right for you.
“You Shouldn’t File for Bankruptcy Because It’ll Negatively Affect Your Credit Score and Be on Your Credit Record for 10 Years.”
Yes, it is true bankruptcy will be on your credit record for 10 years. And yes, it will negatively impact your creditor.
However, is this a reason not to file for bankruptcy? It is if you can afford to pay your bills. If you can find responsible ways to pay off your debts, then, yes, no reason to file for bankruptcy. But if you can’t pay off your bills, you’re probably already behind on your bills – maybe even very behind – or your bank may already be moving toward foreclosure on your house. And, yep, being behind on your bills and going through foreclosure also negatively affect your credit score.
One option people turn to when they’re behind on their mortgage is known as “loan modification.” In short, the lender modifies the terms of the mortgage to make it easier for you to pay, such as a lower monthly payment or a longer term to pay off the mortgage.
Sounds great, right? It can help, but it can also mean you might pay more interest in the long run. And it can also negatively impact your credit score.
So the idea of bankruptcy negatively affecting your credit score isn’t necessarily false, but many of the other options to get debt relief, some the bank might even promote, will do that as well.
Talk with Colorado bankruptcy attorneys Wink & Wink to understand your debt relief options and see if bankruptcy makes sense for your situation.
“Your Credit Score Will Be in Bad Shape for a Long Time.”
Yes, bankruptcy does affect your credit score, but you can repair it over time with responsible spending. This will make it easier to get loans, credit cards, and mortgages in the future. All is not lost if you file for bankruptcy.
Plus, after bankruptcy, you’ve now wiped out much of your debt, thus you now have fewer debts to pay. This can make you more desirable in the eyes of lenders.
Here are some steps to repairing your credit after bankruptcy:
- Pay off any remaining debts on time, if not even faster. Bankruptcy wipes out much of your debt, but some may remain, such as alimony or student loans. Keep up on those payments. If you’re able to, pay even more to pay down the debts faster. This will help your credit score.
- Get a secured credit card, where you first deposit money and then you’re given a credit limit. Keep up with your payments, and you’ll rebuild your credit. This can make it easier to one day get unsecured credit cards (credit cards where you don’t have to first deposit cash).
- Set up automated payments or reminders. Missing due dates hurts your credit, so be sure to pay any debts on time. Set up automated payments or write down the dates on your calendar and never miss a deadline again. Be sure to pay the full balance if you can.
- Keep your credit card balances low. Even if you have a high credit limit, that doesn’t mean you should spend freely. Keep your balance low if you can to show lenders you’ll likely be able to pay it off (and do pay it off!).
“Bankruptcy Will Only Temporarily Halt the Foreclosure Process.”
It is true that bankruptcy cannot keep you in a mortgage if you can’t pay it. But bankruptcy can give you time to catch up on back payments if that’s all that’s needed. What’s better, bankruptcy can actually get rid of your obligation to repay a second mortgage or home equity line. And that would be permanent.
Furthermore, even if your home is going to be foreclosed upon anyway, bankruptcy can keep you in it a few more months and make sure the bank cannot come after you for a deficiency judgment when they sell your home for less than the size of your mortgage. Again, this is a permanent fix to that problem.
“Bankruptcy Is Expensive and Unforgiving.”
An average Chapter 7 bankruptcy will cost you approximately $1,500 and a Chapter 13 around $3,500. Depending on your situation, you may be able to wipe out all your credit card debt and medical bills as well as other debt. For many, the amount of debt that can be wiped out in bankruptcy is 10, 20, or 30 times the amount it will cost them to file for bankruptcy – as in, the cost of bankruptcy is significantly lower than the amount of debt they have.
Talk with an attorney that specializes in bankruptcy in Colorado, such as Wink & Wink. They’ll consider your case and give you an idea of how much of your debt can be wiped out through bankruptcy. For many people in debt, bankruptcy is the best investment they could ever make.
With regard to the process being unforgiving, bankruptcy does require some planning, and there are definitely deadlines that must be met. However, the vast majority of people filing for bankruptcy are able to navigate this process just fine. This is also a great reason to hire a trusted bankruptcy lawyer to help make the process as smooth as possible.
“Should I File for Bankruptcy?”
Bankruptcy is not a one-size-fits-all solution for debt. But it can help you get back on track to a better financial future. Filing for bankruptcy doesn’t have to mean doom and gloom. Rather, it can mean freedom from crippling debt, and you can rebuild your credit through responsible spending and proving to creditors that you’re now able to pay off any future debts. Contact Denver bankruptcy lawyers Wink & Wink online or call 303-410-1720 to see if it’s the smartest choice for you.