Credit Repair And Late Payments Vs. Bankruptcy


Many people who are in a negative financial situation may not want to consider a bankruptcy because of the negative stigma associated with it. However, if you can no longer make your regular payments and you are in a downward spiral, bankruptcy may possibly be the best solution because it allows you to begin anew.

If your financial situation has changed and you are no longer able to make your regular payments it can cause a great deal of unnecessary stress. Knowing that you don?t have the money you need and dealing with creditors not only affects your pocketbook but it also affects your health. Another consideration is that a bankruptcy will stay on your credit report for 7 years or longer, but the fact is that delinquent payments will stay on there that long also.

A bankruptcy may be seen as the last resort but it may be the best way to get past your financial problems and finally get ahead. You will be able to begin again without the undue stress and you will be able to get started back in the right direction. All of your energy can then be focused on improving the things that you can improve like your job situation or income rather than the late payments that you cannot catch up.

Both a bankruptcy and delinquent payments will stay on your credit report for the same amount of time so both affect you negatively. But the bankruptcy will allow you a new start minus the stress while if you keep trying to catch up on your payments you will only prolong your agony. As time passes it also becomes much easier to get credit so your financial life has a chance to improve dramatically.

Starting anew by getting rid of your debt and filing bankruptcy may be the best solution for turning around a negative financial situation. Starting anew will allow you the opportunity to turn things around while trying to keep up with payments that you can no longer afford just keeps you in financial trouble.

Right immediately after you bankruptcy is filed you can begin to rebuild credit. You probably will not be able to get traditional credit but you can probably get a secured loan from a local bank or credit union or a secured credit card. They will probably charge you a higher interest rate so keep the amount you borrow low. Make your regular payments on time for at least 3 to 6 months to establish a credit history and then pay it off completely.

If you apply for a secured credit card you will need to put $500 or $1000 in a savings account that will be used as security for your credit card. Many credit card companies offer this type of service and it can be an excellent way to rebuild credit.

As soon as you begin to take these steps your credit will improve. It will still take some time but you will be on the right track. If you are drowning in overdue bills you may not want to file bankruptcy but the fact is that it may be the only sensible solution for turning your life around again financially.