Many people are concerned that filing for bankruptcy will destroy their credit score. In fact, in many cases, bankruptcy will actually improve someone’s credit score due to their debt to income ratio’s being significantly decreased.
One of the major factors in determining a credit score is how much debt one has compared to their income. The lower the debt, the higher the credit score will generally become. Our experienced and skilled Pottstown, Reading, and West Chester bankruptcy attorneys will be able to develop a plan that is best for your individual needs.
Discharge of Debt Increases Credit Score
The three biggest factors used in determining your credit score are:
- Timely payments on secured debt
- Total amount of unsecured debt
- Judgments on record
While a bankruptcy is a factor that is used to determine a credit score, these three factors listed above far outweigh the effect of a bankruptcy. In most cases, we will either significantly reduce or completely eliminate your unsecured debt and judgments. With other debts are being diminished, it will be much more manageable for you to make timely payments on secured debt. Since you will have less unsecured debt, along with the ability to make timely payments on secured debt, bankruptcy can actually increase a credit score in many cases.
Advertising tactics by the big debt consolidating companies often convey that bankruptcy will lower your credit score. Their motives are simply to get you to pay them rather than your creditors. Unfortunately, your interests are not their priority. Their programs do not offer you the same federal protections that a government monitored bankruptcy will offer you.
Credit Score Recovery Period After Discharge
After you file bankruptcy you can start to rebuild credit based on your new low-debt status. Many people can open new lines of credit, many times is as little as three to six months after their bankruptcy has taken place. Other debtors may have to wait a bit longer, but that is a decision that can be made with the assistance of an experienced bankruptcy attorney.
Berks, Montgomery, Chester County, Pa. Bankruptcy Attorneys
Our attorneys are ready to discuss your concerns and provide answers. Our attorneys represent clients in Pottstown, Norristown, West Chester, Reading, and the surrounding areas. Contact our Pennsylvania debt relief law firm today to learn more about what we can do to help you overcome your legal troubles.