Filing For Bankruptcy? What About Your Poor Credit Rating?!

| August 29, 2017 | 0 Comments

Link to file

Debt is a way of life for a lot of people, and, sadly, it can spiral out of control. When that happens, it seems like the only option is bankruptcy. Indeed, there are benefits and it is possible to rebuild your life after the dust clears. Still, there is one vital area which takes a big hit: your credit score. An individual who declares themselves bankrupt will never be able to get a bank loan or a credit card again. That is a big price to pay, which is why you should consider your options before filing for the last resort.

Here’s how to avoid bankruptcy and protect your credit score

Be Proactive

Lots of people understand they won’t be able to afford the repayments, yet they do nothing. In the end, the situation escalates out of control and bankruptcy is their only avenue. You don’t want to be this person, which is why it is essential to see problems before they occur. If you can’t meet a deadline, phone the creditor and ask them for help. Remember that they want to get as much of their money back as possible so that they might agree to a payment plan. If they don’t, think about selling off valuable assets. A car is handy, but public transport is cheaper and accessible.

Consolidate Your Debt

The key to avoiding bankruptcy is to keep up with your debt repayments. To do this, debt consolidation is an idea worth considering. As shows, it is possible to lower your monthly amount. So, even though you are merging debts, the result is a manageable payment plan. It is true that the overall cost will be higher, especially if the agreement lasts longer. However, it doesn’t matter if you can keep to the agreed figure over that period. Indeed, it will help boost your credit rating by the end of the agreement.

Get Credit Counselling

Another option is to settle the debts with your creditors. The issue is that they can be stubborn and try and take advantage of novices. They understand you aren’t an expert, so they use it to their advantage. This is where credit counseling comes into play. By asking a professional to take on the case, they might have better luck. Let’s face it – they have years of experience in handling these matters. If you are worried about the cost, think about the long-term impact. If they can strike a deal, they will save you a fortune and their fee will seem minimal.

Ask Family & Friends For Help

The final option is to ask the people closest to you for assistance. Usually, if they have the money, they will gladly lend a hand. However, you need to be careful how you approach the topic according to Not only is it a sensitive subject, but it could destroy your relationship. As long as you think you can manage it, there is no harm in asking.

All of the above are realistic ways to avoid bankruptcy and save your credit score.

Category: Bankruptcy

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