Banks, loan companies, and just about anyone who is in the business of lending money prefer that the American public does not know about the many benefits that bankruptcy offers, such as
- Bankruptcy helps debtors reorganize their debts so that they will repay them.
- Bankruptcy stops lawsuits.
- Bankruptcy stops garnishment and repossession.
- Bankruptcy stops foreclosure.
- Bankruptcy stops all unscrupulous creditor contact.
- Bankruptcy helps rebuild credit.
- Bankruptcy grants a “FRESH START.“
Lenders typically do not care whether anyone who owes them money can get a fresh start. In furtherance, of this notion, lenders through their lobby groups and the media promote many myths about bankruptcy.
Lenders want to have their cake and eat it too. On the one hand, most creditors cannot wait to extend credit at exorbitant interest rates to former bankruptcy debtors. On the other hand, there is a prevalent assumption that filing bankruptcy will create future problems obtaining credit to make both secured and unsecured purchases. This is a myth.
Mortgages
Although bankruptcy remains on your credit report for seven to ten years, the ability to obtain a mortgage is not as significantly affected by a bankruptcy filing. Former bankruptcy debtors typically obtain a mortgage within eighteen to twenty-four months after the discharge of their bankruptcy case, provided that credit is restored, and no negative events are reported.
Loans
Bankruptcy debtors may reestablish credit over time if they make timely debt payments. Thus, it is not impossible to obtain an installment loan or a personal loan. A student loan obligor may rebuild credit by making payments on a student loan after the discharge of his or her bankruptcy case. This is an excellent way to rebuild credit.
Credit cards
After a bankruptcy case is discharged, the option to obtain a secured credit card is often available. Paying the balance of a secured card each month is another excellent way of rebuilding credit. Just the same, it is not a good idea for former bankruptcy debtors to use credit cards, secured or unsecured, that have high annual fees and high-interest rates. Debtors should also avoid using secured cards that do not convert to an unsecured card after eighteen months of timely payments.
Debt collectors want to be repaid and are rarely sympathetic. They will not stop calling unless you know your legal rights. An experienced bankruptcy attorney like Theron Morrison will make them stop calling you and assert your legal rights. Call 801.456.9933 today to schedule a FREE consultation. We are Utah’s only statewide bankruptcy law firm and 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.
