The Impact Of Bankruptcy On Credit Claims: Kansas Attorney’s Perspective – Our customers are often very concerned about their credit scores. It’s natural, and frankly, so are we. I check my credit score at least once every two weeks. It is a point of pride for many people. However, for others, it can be the difference between getting ahead in life or not being able to afford the things you need.

We have some good news for people who are worried about the effect of bankruptcy on their credit score. There is good news, and I say it boldly;

The Impact Of Bankruptcy On Credit Claims: Kansas Attorney’s Perspective

That’s right. You have been lied to all these years by people who have no idea what they are talking about. Telling you that if you file bankruptcy you will lose money and you are in the water. You will never get another loan again. We’ve all heard it, and it’s usually coming from the slime ball that charged you 97% interest on a $2,500 car loan.

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We didn’t make this up either, even though we already know it’s true, it’s a report from the Consumer Financial Protection Bureau. The study you can read here is completely valid and has been researched for the past 17 years. There is another conclusion from the study

Lenders and all their hack friends scream from the rooftops about bankruptcy ruining your credit score. The data shows just the opposite. In fact, your score usually doesn’t drop after filing. A huge amount of people who file bankruptcy see an immediate increase in their scores. Don’t believe us, just read what the CFPB says:

Chapter 7 filers’ mean scores recover faster than those of Chapter 13 filers, possibly due to the faster and more likely discharge of Chapter 7 filings.

When it comes to your financial health, let’s get one thing straight. Your credit score is a very poor indicator of your financial health. Your balance sheet is what really matters.

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In the grand scheme of loans and credit, lenders look at your balance sheet as much or more than your credit score. In short, they look at your net worth as assets minus liabilities. If you eliminate the liabilities you have through bankruptcy, your net worth looks even better.

While a credit score is just a number, most banks prefer a measure called the Debt to Income Ratio or DTI. If you wipe out unsecured debt, your DTI will also decrease, increasing your chances of loan approval.

There are actions you can take that will increase your score. One of the best ways to do that is to check your credit report. Not just your score, but what’s listed on your report. When you look at a credit report, you will know that credit reports are highly inaccurate. Nearly 1 in 4 credit reports contain factual inaccuracies that can negatively impact your credit score. That’s why it’s so important to check your credit report often, even more so than your score.

Just because you can file bankruptcy, doesn’t mean you should. This is one of the things you should consider if you need to file. Many different factors influence whether or not you should file bankruptcy. We discuss those factors in one of our recent blog posts

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If you are ready to discuss filing bankruptcy with an experienced bankruptcy attorney, contact our office today for a free, no-obligation consultation. Every year, many individuals file for bankruptcy. And unfortunately, the damage to their credit scores is catastrophic. In fact, the impact is so severe that the credit score will suffer even if the borrower pays off their debt.

The good news is that there are ways to remove a bankruptcy from your credit report. There are also specific actions you can take to boost your credit score immediately.

Bankruptcy is one of the most damaging items that can appear on your credit report. Like judgments and tax liens, they are reported as public records and put on your credit score.

If your credit profile was stellar and you had a high FICO score before filing for bankruptcy, you should “expect a big drop in [your] score,” according to myFICO. But if your credit is already in the trenches due to the presence of negative items on your report, you may “see only a modest drop in [your] score,” the article adds.

Bankruptcy Statistics [updated For [year]]

The more accounts that are included in a bankruptcy filing, the more it affects your score. Why is that? These accounts will report up to seven years from the original date of the crime. And even if they are discharged from bankruptcy, the effect is the same.

(Quick tip: Have you recently filed for bankruptcy? Are the accounts included in the filing accurately reported? If not, send a dispute letter to each credit bureau to correct the problem. Be sure to specify which accounts are incorrect. Also, include under the filing (Include a schedule of outstanding loans and, if applicable, attach any supporting documents to substantiate your claim).

Your credit score will start to bounce back over time, and it won’t take as long as you think. This is due to the fact that discharged debts are no longer due. This means your credit utilization ratio will be much lower now. And since 30 percent of your credit score is owed, you’ll see small increases as creditors update the balance.

But if a bankruptcy can be removed from your credit report, that means good news for your credit score very quickly. More on that soon.

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The bankruptcy report depends on the length of time you file. The rules are as follows.

But the seven-year filing report includes personal accounts. This is the case whether you file under Chapter 7 or 11.

Removing a bankruptcy from your credit report takes a lot of persistence. But it is not impossible. You have two options to proceed:

You can dispute a bankruptcy with a credit bureau. You will need to write a letter to present your case (ie misinformation). You can also request a bankruptcy verification by a credit bureau. They have 30 days to respond or the credit bureau must delete the entry from your credit report.

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But what if they respond without proof that they actually verified the loan? Retrieve a written statement from the court to prove that the credit bureau failed to verify the bankruptcy. You will then send this information to the credit bureaus to remove the bankruptcy from your credit report.

While working to remove a bankruptcy from your credit report, you should pay attention to related collections and charges on accounts other than bankruptcy proceedings. The fewer negative entries on your credit report, the better.

Are you uncomfortable with the dispute process or stuck for time? It can be beneficial to hire an experienced, reputable credit repair company to do the legwork for you. They have the knowledge to work towards clearing bankruptcy in the shortest possible time. Reputable credit repair companies will also address other negative items on your credit report to give your score the best possible chance to recover from the damage as quickly as possible.

If you’ve already suffered bankruptcy, chances are you’re not feeling very optimistic about your future credit score. However, the good news is that filing for bankruptcy won’t haunt you forever, and the odds of rebuilding your credit are definitely in your favor.

Rebuilding Credit After Bankruptcy

Of course, removing a bankruptcy from your credit report is the easiest way to get your credit back in the shortest amount of time possible. You can also take the following actions to increase your score:

There are many reasons why you may be forced to file bankruptcy. But the most important thing when rebuilding your credit is not guilt, but making sure history doesn’t repeat itself. In other words, you need to establish a solid plan for your finances to make your money work for you. Your list of goals should include creating a realistic budget that controls your spending, a safety net, and plans to eliminate debt not covered by the filing.

As mentioned earlier, debts discharged in bankruptcy must be updated to reflect a zero balance. This will automatically give your score a small boost as your credit utilization ratio will decrease.

Therefore, you’ll want to get a free copy of your credit report from AnnualCreditReport.com and make sure the accounts included in the filing are accurately reported. If not, file a formal dispute with the credit bureau to correct the accounts.

How Long Do Bankruptcies Stay On Your Credit Report?

Is your credit score an accurate representation of your credit history, or are mistakes dragging your score down? While bankruptcy may have affected your score, your credit report may contain other inaccurate or outdated information and affect your credit rating.

For this reason, you should regularly review your report to ensure that all information included is accurate and up-to-date. And

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