What does it mean to be “credit worthy” and why does everyone care so much? Is it actually that important? Credit scores in today’s society can actually be critical. They are used as a determination of a borrower’s risk. They are used to determine insurance rates. They are used to obtain application approval for rental properties. They are even used in consideration of new job candidates. Because of the various implications of a credit score, the “grooming” of credit has become a major industry in modern society. This becomes particularly popular for recent bankruptcy filers, possibly because they’ve already felt the limitations of a poor credit rating and they don’t want to experience it again.
In fact, in many situations, financial ruin was the turning point that allowed consumers to change the way they were viewed by the credit reporting agencies. Consumers who are drowning in credit card debt (a very common reason for bankruptcy filings) are often incurring negative marks on their credit report continuously (late payments, high balances, maxed out credit, etc.) When this is the situation, it is nearly impossible to work towards improving your credit score. The trick is to get out from under the overwhelming debt first and then work on your credit score. For many, it’s the only solution.
The most efficient way to get out from under this type of financial burden is through a Chapter 7 bankruptcy discharge. While the bankruptcy filing itself will leave a negative mark on your credit report, that many feel is worse than the “smaller” issues of late payments, etc. it is a substantially negative mark on your credit that has an expiration date and allows you to walk away from the pile of debt that was strangling you and disallowing you from any possibility of creating a positive financial situation in your life and your home.
There’s never been more opportunity to recover a good credit score post-bankruptcy than in modern society. Bankruptcy is an accepted solution and many take advantage of its protection in order to get out from under stifling charges and exorbitant interest rates that prevent them from lowering balances that go up endlessly. Once the discharge is received, the filer can actively recover financially by obtaining safe and conservative credit, financing, etc. and making on time payments on minimal charges and balances. Most bankruptcy filers are surprised at just how quickly they can repair their credit post-bankruptcy.
The positive effect of bankruptcy on an individual or family’s finances far outweigh the negative and in some cases, the discharge of debt is the only way they will ever get out from under their escalating revolving credit balances. If you need to discuss the possibility of obtaining a discharge of debt through a Chapter 7 bankruptcy filing, please get in touch with one of the experienced southern California bankruptcy attorneys at Westgate Law today.