Bankruptcy and Your Credit
A San Jose bankruptcy attorney chats on what most debtors want to know: How bankruptcy will effect your credit....
The stigma that filing for bankruptcy is the end of your credit life lacks foundation. It is true that filing for bankruptcy stays on your credit report with the three major bureaus for up to ten (10) years. It is also true that it can drop your credit score by up to 100 points. Unfortunately in today’s society, your credit report is basically your lifeline. Lenders use your credit score to judge you as a person when you apply for a car loan, house mortgage, student loan, apartment rental, or credit cards. So it would seem that when a lender sees that a debtor has filed for bankruptcy because they were unable to fulfill their prior obligations, they would be completely turned off from extending credit to that person.
But this is not always the case. Sure, large banks like Bank of America, JP Morgan Chase, and Wells Fargo will look mostly at your credit score because they are volume driven, not customer relations driven. Smaller banking institutions and credit unions are an alternative for people with poor credit and/or bankruptcies. They will work with the individual based upon a personal relationship. They sit down and talk to you about what event(s) happened in your life to cause the negative marks and what you have done to correct them since. Smaller banking institutions and credit unions typically have lower interest rates and more flexible payment terms.
Further, an individual who files for bankruptcy may only discharge his debts in a Chapter 7 bankruptcy once every eight (8) years, and a Chapter 13 bankruptcy every six (6) years. This means that a creditor will have more security and confidence in extending a line of credit to an individual knowing that they cannot discharge their debts again for that amount of time. Therefore, they are more willing to possibly offer a higher limit or lower interest rate than to someone with a slightly higher credit rating who has not previously had their debts discharged. So, just as it was once thought that the world was flat and the center of the universe, bankruptcy is not the end all of credit.
If you have questions regarding Bankruptcy in San Jose please contact us at 408.279.2288 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Jose Bankruptcy Attorneys. After you have spoken with one of our downtown San Jose bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of San Jose Bankruptcy Lawyers can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Jose and the South Bay!
