How does filing Chapter 7 Bankruptcy affect my future credit? This is the number #1 concern people have filing bankruptcy in St. Paul, MN and across the state of Minnesota. The myth—you file Chapter 7 Bankruptcy and you ruin your credit for life and beyond. Why is this a myth? Well because it is not true and because what you think happens does not. In fact, it is just the opposite.
Have you ever dreaded going to an event, any event, and then when you went you actually loved every minute of it? Well, filing bankruptcy is not quite like that but similar. How? Because what you think is going to happen to your credit after bankruptcy does not happen.
The truth is Chapter 7 Bankruptcy improves your credit. What? This is crazy right? Well, it is true. Why? Because when you receive a Chapter 7 Bankruptcy discharge you have wiped away your liability on the debt. But, you say don’t future lenders look at that and go, we are not going to lend to this person? No. Why? Because what you think future lenders care about is not really what they care about at all.
You see, future lenders don’t care if you are paying other creditors necessarily. What future lenders REALLY want to know is are you going to pay us? Need proof? Why can’t a person with 60k in credit card debt get a loan when they are current on all of their credit card payments? Because the future lender is worried they may not have the ability to pay them back. What if the 60k in credit card debt is gone? Do you think the lender is more confident you will pay them back? Yup.
When the time is right, or when you are ready, reach out to Kain & Scott at www.kainscott.com. You will be so happy you did!