The perception among many is filing Chapter 7 Bankruptcy is the death knell to your ability to obtain future credit. In a way, I can understand this perception. For example, many of our clients report the following version of events to us: we are current on all our payments and our credit score is quite good.
But, there is always a but. But, the client foresees there will be a day when they will not remain current on their payments. Typically, some event or events have caused the tables to shift and the client knows they will not be able to remain current. Still, even if they could remain current on their debt payments, we ask the client this pertinent question: can you, in light of your current debt situation, obtain credit now? For many, the answer is no way. For others, the answer is maybe at higher interest or if they had a co-signor.
To us, if you have a high credit score and if you are current on your debt payments, but you cannot obtain credit; you do not have good credit. This is the ultimate irony, right? You are current on everything and have a high credit score; aren’t future lenders supposed to love this? Not quite. No lender wants to be the straw that breaks the camel’s back. The more debt you have, the riskier it is for a lender to lend you money.
This is why eliminating debt is the best thing you can do for your future credit profile. Getting rid of debt makes you more attractive to future lenders because you go from debt to no debt.
CALL NOW FOR A FREE STRATEGY SESSION FROM AN MN BANKRUPTCY LAWYER AT LIFEBACK LAW FIRM
When the time is right, or when you are ready, reach out to Minnesota’s most kind and helpful bankruptcy law firm by going now to www.lifebacklaw.com. You will be so thankful you did.
