How Bankruptcy Can Improve Credit Score

Unlike what most people think, filing for bankruptcy is not the end of the world. The surprising part is that it’s actually the dawn of an even brighter future. Filing for bankruptcy in Colorado gives you a fresh start with relief from all your prior creditors. Bankruptcy can improve credit score. After a few years, your bankruptcy might even turn to a success story.

There is no denying that it might come with a high price and a major hit on your credit score. However, that’s the same thing that will help your credit both in the long and short term. Living paycheck to paycheck, struggling with debts and maxing out on your credit cards means that your credit score is already on a sinking ship.

The sad part is that this only gets worse with time. At such a point, filing for bankruptcy doesn’t drag your credit score down a trail. Instead, it might be the only thing that saves it, especially with the newly enacted bankruptcy laws. Let’s take a look at what really happens when you file for bankruptcy in Denver, Aurora or Englewood Colorado.

 

Filing Bankruptcy in Colorado Can Improve Credit Score

1.     Bankruptcy reflects on your credit scores for 7 or 10 years only

Most people tend to think that filing for bankruptcy will affect their credit scores forever. What they don’t know is that it stays on their credit score reports for only 7 years for chapter 13 filings and 10 years for chapter 7 filings. And that’s not to mean its dragging down your score the whole time.

The good news is that if you take advantage of the clean financial slate it offers; you can significantly change your life forever. Besides pulling you out of any unmanageable debt, it helps to bankruptcy can improve your credit score rapidly.

 

2.     After bankruptcy, you will be cleared of all delinquent reports

A bankruptcy file serves the greater good, especially, if you had high credit balances and late payments in your credit report. Filing for bankruptcy wipes all those debts clean.

This means that all debts that have been discharged in bankruptcy can no longer appear as delinquent in your report. Instead, they get discharged in your bankruptcy as well. And in some instances, this could boost your credit score.

 

3.     You can re-establish your credit score in a year

Although this is majorly influenced by the steps you take after bankruptcy discharge and your initial credit score, you can re-establish your credit score in one or two years. According to Colorado bankruptcy laws chapter 7 you can free up your money and even clear out all your debts.

All you have to do is start with simple steps such as paying bills on time and using a secured card. This way you will restore your credit score faster than you imagine.

In Summary…

To most people, filing for bankruptcy might not be their go-to solution. However, if you want to get your finances back on the right track, this might be the best option for you. If you are not sure whether your financial situation is worth filing for bankruptcy, there is no need to stress yourself out.

You can hire a bankruptcy attorney with a free initial bankruptcy consultation. This applies to both businesses and individuals in Denver, Aurora and Englewood (Colorado) and other surrounding cities.  Call or email today to learn more about how bankruptcy can improve credit score.