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Bankruptcy: How It Can Effect Your Credit And What You Can Do After To Repair It

Apr 16, 2008
Over the years I have heard many different views on whether or not somebody should claim bankruptcy. Is it a good thing to claim bankruptcy, or a bad thing? Well unfortunately I know first hand the effects of bankruptcy, it devastates your credit and if I had the choice over, I wouldn't do it. To me Bankruptcy doesn't really have any advantages, yes the creditors stop calling and you get a fresh start. But is it really a fresh start?

Let's look at a scenario: Let's say you had an accident (that lead you to bankruptcy), you had no insurance and lost your job because of it. Your debts started piling up and the hospital bills were insurmountable. You lost your house, your car was repossessed and you couldn't make your regular payments. As a result your credit suffered the most. If your in this situation, it is a lot more grim than the picture I am painting, but you are positive and you know things will get better. Right?

OK fast forward, you get past the bill collectors calling, they given up and things are back to normal for you. Except one thing, you have all those negative hits on your credit report and your credit score is in the dirt. You can't qualify for a thing and if you do qualify for anything, it is a car that you are paying so much in interest for it's ridiculous! What do you do? Well know there are two ways you can go with this and for the sake of this discussion we are going to file for bankruptcy, as you think this is the answer.

You filed and it's discharged, sweet you think. Now that my bankruptcy is over I can get on with my life, buy the house I always wanted and finally get the car I dreamed of. You go to the car lot and the guy says: Sure we can get you qualified but we need a "ridiculous" amount of money down and the interest is sky high. They say it's because of the charge off's and yes the bankruptcy, as well. This is the same story you heard before the bankruptcy, what gives? You see, bankruptcy really doesn't improve your situation at all and truth be told it makes it worse. For up to three years or more after!

At this point you are thinking you need to get that bankruptcy, charge-offs and negatives off your credit and fast. You have heard of all the companies out there who claim they can do it, but can you really trust what they say? I am going to tell you it is indeed possible and I know of (others I am not so sure about) one service that does it all the time.

OK, so instead of using a service, you decide to do it yourself. But if you are not dedicated or in it for the long haul, than you should reconsider now, as it will take about three to six months of constant work. In my article entitled: "Remove Bankruptcies, Charge Offs, Repossessions And More: How To Get Them Off" I go into detail about the necessary steps needed to get such items removed and would advise reading it now.

When considering the repair of your credit, keep the following in mind

- Read up on the Fair Credit Reporting Act as this will give you some ammo needed for your campaign

- Formulate a well-written letter and not a form letter off the Internet. Be creative and vent your frustration a little but not too much. The letter has to be original because if the bureaus think it is a form letter from a repair company, then they just respond back with one of their own.

- Don't lie! It's a federal offense and you can be successful without doing it.

- Send letters certified mail and keep copies, as you might have to show proof you sent the letter. The bureaus have 30-days to validate the debt (not much time) or remove it. In case you didn't know they are bombarded with billions of letters each month.

- Don't dispute to often. Send Disbute letters about 5-10 days after each response from the credit bureaus until the results are seen.

With the above in mind you will be able to get items removed from your report, it is done everyday. There are many loopholes in the system and if you look for them, get creative and stick to it, you can have any blemish removed from your report. The credit bureaus would like you to believe different, but the fact is that it's possible. I am not an advocate of bankruptcy, but if you chose to file, there is hope after it. Just remember that it is easier to clean up your report with no bankruptcy on it. Either way you can come out a winner! Good luck!
About the Author
You can go here to sign up for our newsletter or to find out more about having foreclosures, bankruptcies, late payments and other derogatory items removed from your credit report contact creditexpert@scrubyourcredit.com or at: http://www.scrubyourcredit.com
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