Does Chapter 7 or 13 Bankruptcy Ruin My Credit?

Bad credit can’t be ruined by getting out of debt. Bankruptcy gets you out of debt. No debt = better “credit”.

Below is an article written by Attorney Peter Francis Geraci explaining filing a bankruptcy could actually IMPROVE your credit score. Read more articles written by PFG at https://www.infotapes.com/Articles.

Most people filing bankruptcy have bad credit scores. Most are below 600. That is bad credit.

Bad credit can’t be ruined by getting out of debt. Bankruptcy gets you out of debt. No debt = better “credit”.

Studies have shown that your credit score goes up after bankruptcy discharge.  Take my 2 hour debtor education course if you want to improve your credit.  Go to http://www.pfged.com   

If you can get a house and a low interest rate on a vehicle, you probably don’t even need bankruptcy relief. 

But, if you can’t afford to pay your creditors, but you have a good credit score, you probably don’t have good credit, you have good debt!  Soon or later, the credit bureaus are going to notice you’ve maxed out on credit and your credit score is going to fall.  

Bankruptcy does not generally ruin your credit more than it is already. Many people say to me, “I’m current on all my cards. I have good credit.” Then I find out that they have been getting cash advances on one card and using that money to pay the other charge cards. That is borrowing money when you cannot repay it. If you do that, you may not have good credit.  

Credit is the ability to borrow money. Lenders look at several things about you if you want to borrow money. First, they look at your ability to repay it. If you have a lot of bills to pay now, you probably can’t afford to borrow more, because you won’t be able to repay it.

Second, the credit bureaus look at your history of repayment. If creditors reported you slow-pay, or have lawsuits, garnishments or repossessions, you already have ruined your credit history. Getting rid of your bills in a bankruptcy may improve your situation. You will have no bills to pay, or maybe just one or two. You will then be able to try to save a little money. Also, you can’t file another bankruptcy until six years have passed. Many lenders will allow you to re-establish credit, because now you have a better ability to repay.

The third main factor that a lender looks at is the security or collateral given for the loan. You may need more money down than in the past.

At Geraci Law, we want to make your life better.  So if we think you don’t need bankruptcy relief, we tell you.  Take our free 20-minute credit counseling course at Infotapes.com, or our 2 hour Debtor Education Course at pfged.com for more information. 

Dial 1-800-CALL-PFG for a free phone mini-consultation, or make an appointment online 24/7 at www.infotapes.com.  Bankruptcy laws are in place to help you.  Who knows bankruptcy like Geraci Law?  Geraci Law has 30,000 5-star reviews 5starsince November 2016!

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.

Better Credit Scores After Bankruptcy

A study by Harvard and the Federal Reserve found people who FILE for bankruptcy are generally in a better position financially with access to better credit than people who do NOT file an attempt to slowly pay down bills.

A study by Harvard and the Federal Reserve found people who FILE for bankruptcy are generally in a better position financially with access to better credit than people who do NOT file an attempt to slowly pay down bills. See https://peterfrancisgeracilaw.com/2020/08/05/chapter-9-is-bankruptcy-bad/

That’s right folks, filing a bankruptcy can be a GOOD thing. You eliminate your obligation to the balances with the opportunity to REBUILD. According to the Federal Reserve,

“[people who file bankruptcy] experience a sharp boost in their credit score after bankruptcy, whereas credit scores recover at a much slower pace for individuals who remain [in debt]. The credit score of bankrupt individuals exceeds the credit score of insolvent individuals by 40-80 points. In addition, those who go bankrupt open new unsecured accounts post-bankruptcy at a higher rate (by around 15 percentage points) than those who don’t file bankruptcy, while the number of inquiries is very similar across the two groups. This indicates a difference in access to credit, not demand for credit. [The Federal reserve] conclude[ed] from this evidence that the ability to file for Chapter 7 bankruptcy is associated with better access to credit, and while both insolvency and bankruptcy are forms of default, the debt discharge associated with bankruptcy leaves filers in a better financial position than individuals who become insolvent in similar circumstances.”

So your credit score could increase by 40-80 points! The money you are spending slow paying the minimums is money you can start SAVING or using to pay for essentials like groceries and gas instead of relying on the credit.  

It’s not time to wait. It’s time to handle your debt once and for all. Geraci Law is here for you. We’re happy to meet with you in office or virtually. It’s time to decide if you are ready to be DEBT FREE with a higher credit score and fresh start to reach your credit goals.

Read entire study here https://scholar.harvard.edu/files/pgoldsmithpinkham/files/dgy_bankruptcy.pdf  

Dial 1-800-CALL-PFG for a free phone mini-consultation, or make an appointment online 24/7 at www.infotapes.com.  Bankruptcy laws are in place to help you.  Who knows bankruptcy like Geraci Law?  Geraci Law has 30,000 5-star reviews 5starsince November 2016!

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.

Helpful Links & Resources

Geraci Law updates our site constantly with useful tools about debt, budgeting and education.

Helpful Links & Resources

Geraci Law wants to be a resource to anyone in debt, learning how to budget or wanting to learn more about finances or bankruptcy. There’s a lot of information out there – go with the firm you know and trust.

Check out https://www.infotapes.com/Links for information. We are constantly updating with new links. If you have questions or need a listening ear, give us a call at 800 CALL PFG. It’s free!

Dial 1-800-CALL-PFG for a free phone mini-consultation, or make an appointment online 24/7 at www.infotapes.com.  Bankruptcy laws are in place to help you.  Who knows bankruptcy like Geraci Law?  Geraci Law has 30,000 5-star reviews 5starsince November 2016!

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.

Bad Credit = MORE Interest

Credit scores fall into 5 categories to determine interest rates. Consider Geraci Law to help with your credit score!

Bad Credit = MORE Interest

According to an article on CNBC (read here) – more than 1/3 Americans have a credit score that is considered “subprime.”  If you are one of these people, you may end up paying THOUSANDS more in interest than borrowers with better credit scores. Filing a bankruptcy can HELP improve your credit score!

The Consumer Financial Protection Bureau (CFPB) puts Americans into five different categories.

Deep Subprime – any credit score below 580

Subprime – any credit score between 580-619

Near-prime – any credit score between 620-659

Prime – any credit score between 660-719

Super-prime – any credit score above 720

Where do you fall? Your credit score is not only determined by timely payments. Your debt to income ratio plays a role. Do you have more debt than income in a year? Are you behind on payments? Are you considering borrowing money from a 401K or family member to pay off debt? Before you make a huge decision, talk with a Geraci Law attorney (guess what – it’s FREE).

Even if you are paying your minimum payments, you may not realize how much you are paying in interest! According to the CFPB, a Deep Subprime borrower paid 21.50% interest versus a Super-Prime borrower paying 12.50%. That is a HUGE difference.

Filing a bankruptcy could change your life for the better. You may IMPROVE your financial future to qualify for the better rates on mortgages, car loans or even credit cards. Don’t know your credit score? Not sure of what debt is reporting? Geraci Law can help!

Want more information about credit scores and bankruptcy? Below are a couple of links to related topics!

FICO Creates New UltraFICO Scoring System

When Should I File For Bankruptcy?

Credit Concern? Call Geraci Law!

Dial 1-800-CALL-PFG for a free phone mini-consultation, or make an appointment online 24/7 at www.infotapes.com.  Bankruptcy laws are in place to help you.  Who knows bankruptcy like Geraci Law?  Geraci Law has 30,000 5-star reviews 5starsince November 2016!

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.

What Financial Help Do You NEED?

Did you know you can DISPUTE credit reporting errors? Everyone is entitled to a FREE credit report once per year from Experian, Equifax and Transunion. If you see a mistake, then you should dispute the error with the individual credit bureau.

You can find bad information online. Geraci Law wants to help YOU answer questions about bankruptcy, debt and financial resources. We frequently update our website with important financial links – you can check it out at https://www.infotapes.com/Links

Disputing Credit Report Errors

Did you know you can DISPUTE credit reporting errors? Everyone is entitled to a FREE credit report once per year from Experian, Equifax and Transunion. If you see a mistake, then you should dispute the error with the individual credit bureau.

Below are the links for disputing credit reporting errors. If you underestimated how much debt you owe, if you are struggling to meet the minimums, we’re here for you. Geraci Law offers FREE consultations with our experienced staff.

Links to Dispute Credit Reporting Errors:

More Help is Available

Dial 1-800-CALL-PFG for a free phone mini-consultation, or make an appointment online 24/7 at www.infotapes.com.  Bankruptcy laws are in place to help you.  Who knows bankruptcy like Geraci Law?  Geraci Law has 30,000 5-star reviews since November 2016!

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.