Many Florida residents who are struggling to cope with their overwhelming debt are reluctant to file for bankruptcy. There are several reasons for this hesitation. Some avoid seeking this type of debt relieve because they think filing under Chapter 13 or Chapter 7 will result in irreversible damage to their credit rating. However, the truth is, a discharged personal bankruptcy may make borrowing easier after a certain amount of time passes.
The Long Term Impact of Personal Bankruptcy
Filing Chapter 7 bankruptcy will remain on your credit report for a period of 10 years. The impact it can have on your credit rating will be reduced after just two years. When lenders see a discharged bankruptcy on your credit report, it tells them you are no longer obligated to pay back certain debts you have incurred. Additionally, many lenders realize that consumers will often borrow cautiously moving forward and pay their bills diligently to avoid facing the same situation in the future.
There are other options consumers can take advantage of, as well. For example, secured credit cards allow you to rebuild your credit rating after filing for bankruptcy.
The Proof is in the Numbers
Recently, The Federal Reserve Bank of Philadelphia did some research on the effect that filing for Chapter 7 bankruptcy had on your credit rantings. Those conducting the study looked at the Equifax reports for the borrowers who have filed a Chapter 7 petition in 2010. On average, it was found that these individuals’ credit ratings increased from 538.2 to 620 after the bankruptcy filing was complete. This typically takes between six and eight months.
Common Misconceptions about Bankruptcy
Unfortunately, many Florida residents who are suffering financially believe the myths about bankruptcy. They believe that filing is worse for their credit rating than just trying to continue to dig themselves out of the debt hole they are in. When the facts are considered, this is just not the case.
The point of bankruptcy is to provide you with a bit of relief. While there may be a slight impact on your credit rating, it typically isn’t as severe as most people believe, and in the long run, bankruptcy can actually help a person’s borrowing power.
Why Hire an Attorney?
Lawyers in Florida who have experience in this area can help dispel more of the myths surrounding filing for personal bankruptcy. They can also explain that the assets of those who file a Chapter 7 bankruptcy are very rarely seized. Also, they can ease the fears that a Chapter 13 payment plan won’t leave you enough money to live comfortably.
An attorney with experience in bankruptcy law can also help stop harassing calls from creditors and collection agencies and prevent lenders from garnishing your paychecks.
If you have more questions about filing bankruptcy in Florida, contact the bankruptcy attorneys at Badgley Law Group by calling 407-781-0420. They can review your situation and help you figure out if bankruptcy is the right solution for you.