Park Ridge Bankruptcy Attorney Reflects On Credit Report Concerns

According to Park Ridge bankruptcy attorney, filing bankruptcy and your credit report is a double-edged sword.  Filing bankruptcy will appear on a credit report for up to 10 years.  However, if you don’t file a bankruptcy, you are going to have all that negative credit information on your credit report for many more years than that in certain circumstances.  What I tell clients is you have to get out of debt before you can think of rebuilding and getting back into some type of credit situation.  Granted, the bankruptcy filing is not a good thing for your credit report, but in the long run, it might be the best thing you do.  If you can eliminate your debt practically overnight, and you have the ability to show creditors that you are a good risk again and that you have the ability to repay your new debt. 

For example, if you have thousands of dollars’ worth of credit card debt, medical bills and personal loans on your credit report, that any kind of auto lender or mortgage lender is going to see that information and probably deny you credit.  However, if you file a Chapter 7 bankruptcy, that lender or credit institution will be able to see that you actually took an effort, a step in fact to get out of debt and that all of the negative information on your credit report has been eliminated through the bankruptcy filing.  Thus, you are a much better risk to get credit in the future since you don’t have all those other debts hanging out there that could collect against you. 

We see this for the most part with auto lenders who solicit my clients were all bankruptcy clients before their Chapter 7 case has even gone to discharge.  What this means is that they know that Chapter 7 is going to eliminate the miscellaneous debts and they are willing to take a chance on clients by giving them auto financing going forward.  Creditors know that if you don’t make your auto financing payment, they can simply repossess the vehicle and come after you for the deficiency because it’s a post-petition debt. 

However, don’t be afraid of the information being on your credit report.  It’s better to file a bankruptcy and eliminate the debt then to have all the negative information on your credit report from old debts.