One of the greatest concerns our clients have about bankruptcy is the fear that filing bankruptcy will ruin their credit. They are afraid they will never be eligible for a credit card, car loan or mortgage if they file. Nothing could be further from the truth !

Another common misconception is that your credit will be ruined for 7-10 years after you file for bankruptcy. The truth is quite the opposite. The fact that you received a bankruptcy discharge will enable your credit score to improve very quickly. Does this seem counterintuitive? Here is why your fears are misguided:
  • You should have no bad unsecured debt.
  • Your debt to income ratio will most certainly be better than it has ever been in your adult life.
  • You cannot file another bankruptcy and get another discharge for a number of years.

For these reasons, you will no longer be a credit risk. Therefore, your credit score should improve very quickly . Your credit score is nothing more than a calculated estimate of your likelihood to default on future loans. Once you get rid of your burdensome debts in bankruptcy, you are obviously less of a risk of defaulting on future loans.

The purpose of the Bankruptcy Code is to help give you a fresh financial start. Almost 100 years ago, the United States Supreme Court emphasized this point by stating:

"It [bankruptcy] gives the honest but unfortunate debtor ... a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt." — Local Loan v. Hunt, 292 U.S. 234, 244 (1934).

Contact Pelley Law Office, L.L.P., Today

We invite you to call us at 972-608-0335 to schedule a free confidential consultation with an experienced financial lawyer. You can also contact us by email now to request an appointment to discuss your options. You will be under no obligation to hire us. We look forward to speaking with you and explaining how we can help.

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