Bankruptcy is a FRESH START, not the end of the world.

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The goal of the Morrison Law Group is to provide clients with a fresh start through the filing of a bankruptcy case. Doing so requires assisting clients during a pending bankruptcy case and assisting them after they receive their discharge order and their bankruptcy case closes. In addition, we will review credit reports and dispute any harmful or inaccurate credit reporting.

If you want to rebuild credit after bankruptcy, there are some things you need to know.

The idea of bankruptcy scares many people, but it shouldn’t. Bankruptcy is your opportunity to start fresh and have a new beginning. It’s not the end of the world at all, in fact, bankruptcy can be quite liberating.

After the bankruptcy process is complete, you will receive a final report that details what was discharged in your case. You should verify that this report accurately reflects any debts that were discharged (wiped out).

It is pretty standard for erroneous information to be listed on the discharge statement. If there are inaccurate or false entries, dispute them immediately with the credit bureaus and with your creditors by contacting them directly. Erroneous information can be the most problematic when it is listed as a debt that was not part of your bankruptcy petition or erased from your bankruptcy petition.

This is also true if the bankruptcy was dismissed, vacated or stricken from your file at any point prior to receiving a discharge order or after receiving a discharge order but before receiving your discharge.

If you’re unable to pay off your debt over time, then the courts will do it for you through bankruptcy proceedings with some limitations on what you can purchase until all balances are paid off in full (which they usually are).

The process itself is relatively simple and straightforward, and there isn’t much more than filling out some paperwork and meeting with an attorney.

 

Verify That Your Credit Report Accurately Reflects Your Bankruptcy

Once you have adequately dealt with all creditors, you must verify that your credit report accurately reflects your bankruptcy. The best way to do this is by checking your credit report one month after the date that you completed your bankruptcy.

One of the most common myths of filing bankruptcy is that it will ruin a debtor’s credit indefinitely – forever. But, yes, bankruptcy does negatively affect a debtor’s credit score. Thus, a former debtor must monitor what is reported in a credit report.

Filing for bankruptcy can be a difficult decision to make. It’s essential to weigh the pros and cons before taking this step, as it will have long-lasting effects on your finances, credit ratings, and more.

Here are some myths about bankruptcy and credit that you should know about:

# Myth 1:

The most common myth of filing bankruptcy is that it will ruin a debtor’s credit indefinitely – forever. Yes, bankruptcy does negatively affect a debtor’s credit score. Thus, a former debtor must monitor what is reported in a credit report.

# Myth 2:

bankruptcy will ruin your credit for years. Because bankruptcy stays on your credit report for ten years, you may think that it will always be there and that you will never get another loan or line of credit again. However, good history with other lines of credit will offset the bankruptcy information on your credit report, so it’s possible to have a decent score in just six months after filing. Of course, this depends on how much debt you’re dealing with before filing, whether or not you were making payments on time before you filed, whether or not you can make even better payments while your debts are in bankruptcy, and how long it takes the creditor system to release your debt.

# Myth 3:

Another common myth is that credit cards are an easy way to get out of debt. This is not true! If you are spending more than you ultimately have, it will be even more challenging for you to pay off the balances if they stay on your card. Even if you make the monthly minimum payment, you may be paying out more in interest than what you are ultimately paid off.

# Myth 4:

The media makes it look like everyone is filing for bankruptcy nowadays. According to a study by the American Bankruptcy Institute, less than 3% of Americans have filed bankruptcy or experienced debt relief through the use of Chapter 7 and Chapter 13 bankruptcy.

# Myth 5:

It is not uncommon for people to believe that filing bankruptcy will ruin your credit indefinitely. The idea of bankruptcy affecting a debtor’s credit score may be daunting. Still, it is essential to know that the effect of bankruptcy on the debtor’s credit is temporary and can be overcome with a good history in other lines of credit.

Debt can be an inevitable part of life.

We all need money to live on, and we will inevitably spend more than we earn at some point (or maybe every month). But there are many things you can do to make your budget work better for you: sticking with a plan like the one Why I Budget has put together.

A person’s credit score often improves after a successful chapter 7 bankruptcy case because creditors take no further action to collect outstanding balances. In contrast, a person’s credit score may decrease after a chapter 13 case because monthly payments will be due to creditors for up to the next five years. Because of this, it is advisable to explore all options before deciding which type of bankruptcy treatment you should pursue.

Debt is inevitable, but there are many things you can do to make your budget work better for you. One of these ways may be filing bankruptcy which will help clean up your credit report and eliminate any delinquent balances that show a $0 balance after the case has been filed and successfully discharged.

If you are interested in filing for bankruptcy, it is essential to know that each type of case will affect your credit report differently. After a bankruptcy is completed, accounts can be adjusted in terms of the amount owed and the length of time they have been active.  If you are considering bankruptcy, a good rule of thumb is to choose the chapter that will have the most positive effects on your financial situation. 

​If you have any questions, contact Morrison Law Group about how you may qualify for a Chapter 7 or Chapter 13 bankruptcy case. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.

Theron Morrison

Theron Morrison

Utah’s top bankruptcy and consumer protection attorney.

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