Most people that come for a bankruptcy consultation had excellent credit up until a job loss, or an illness, injury or a divorce. Unplanned life events force them to dip into their savings account or they start selling off assets to continue paying that minimum payment and "maintain" their credit scores. They are usually depressed and down on themselves when they come in for a free consultation at our Davie or Coral Springs office. In most cases, their credit is already shot because they have missed payments or are behind in their mortgage. In some cases, their bills are current but they know they cannot afford to make one more payment and proactively come in seeking advice.
A Chapter 7 bankruptcy will remain on your credit report for 10 years. A Chapter 13 will be on there for 7 years. But that doesn't mean that you won't have credit again for 7 to 10 years. To the contrary, most clients discover that they actually get a credit card within weeks or months of closing out their bankruptcy case. Without bankruptcy, there was no opportunity to get credit because of their credit scores.
Bad credit entries stay on the credit reports for 7 years from the date of last activity. If you are paying your cards through a debt consolidation plan, then it's 7 years from the date of last activity - which is usually when you settle a card. That could take months or years to do because you have to pay into the plan long enough to have a settlement offer available. You are not getting credit while you are making these payments.
Further, current FHA guidelines allow you to qualify for an FHA loan just two years after your Chapter 7 case closes if other conditions are also met. Try getting approved for a home loan while you're consolidating your debts or shortly thereafter!
Find out all the facts about bankruptcy and how it can actually help improve your credit score. Don't listen to friends, neighbors or the credit card companies. Get the facts! Call today for a free consultation. It could be the fresh start you are waiting for.
