You may find your debt level in Long Island, New York, to be unmanageable, yet you may be reluctant to file for bankruptcy because of the damage it could do to your credit. At Macco Law Group, we understand your concern. As MarketWatch observes, filing for bankruptcy can prompt a 200-point decrease in your credit score.
However, if carrying massive amounts of debt has already had a negative effect on your credit score, filing for bankruptcy may serve as a rehabilitative measure. Here is the truth behind some of the most persistent myths about bankruptcy and credit.
- Bankruptcy does not forever ruin your credit
Bankruptcy is not intended as a punishment. Rather, it is a way to clear your debts and get a fresh financial start. Yes, it will have a negative effect on your credit in the short term, but by discharging your debt, it gives you an opportunity to develop good financial habits and start rebuilding your credit.
- Bankruptcy does not prevent you from getting credit cards or loans
During the early credit rebuilding process following bankruptcy, it may be more difficult to obtain a loan or a credit card. However, there are alternatives available for those who need a loan or would like to rebuild credit by obtaining a card.
- Bankruptcy does not stay on your credit record forever
Most bankruptcy records remain on your credit report for seven years. The exception is a Chapter 7 bankruptcy, which remains on your record for 10 years.
You may wish to explore other options before filing for bankruptcy. However, you should not look at bankruptcy as the end of the world when it actually provides a new beginning. More information about bankruptcy is available on our website.