Four Common Myths About Bankruptcy

Posted onLeave a commentCategoriesBusiness Law

Bankruptcy is something that you want to avoid. It is a last resort effort to get out from under debt. While it will erase most of the debt you have to pay back to lenders, there are some extreme consequences such as the inability to borrow money for extended period time and an extreme dip in your credit score.

If you are considering bankruptcy, be sure to contact a bankruptcy law firm in Pittsburgh PA right away. They have the experience and knowledge to help you navigate through the process effectively. While you can do it yourself, the laws are complicated and you could make a mistake, causing even more problems.

While bankruptcy is fairly common, there is a lot of misinformation out there about the process and what it does. Don’t fall for the myths surrounding bankruptcy, talk to a lawyer to get the facts.

Four Common Bankruptcy Myths

1. Your Past Can Reduce the Credit Score Damage – Many filers are under the false impression that their credit score won’t be hit as hard if they have a good payment history on their credit report. This is not true. Having a positive past payment history has very little effect on your credit score once you file for bankruptcy.

2. Your Credit Will Be Destroyed For Almost a Decade – While it will take a big hit, you can still work to build your credit score back up while the public record bankruptcy information is on your credit report. Use the bankruptcy as a fresh start to start making payments on time and you will see a rise in your score.

3. Bad Marks on Your Credit Score Will be Erased – This is not true. You won’t owe the money anymore, but the negative marks on your record will stand for at least 7 years. Their negative effects will be mitigated, though.

4. Your Credit Score is Ruined Forever – The effects of declaring bankruptcy on your credit score are drastic, but they are not permanent. You will see a massive dip in your score immediately, but it will repair over time if you are fiscally responsible.

Leave a Reply