Bankruptcy – We Wrote the Book on It By Ronald C. Sykstus and the Bond and Botes Team of Lawyers
Excerpt from Chapter 7 – “Effect of Bankruptcy on a Credit Report and How to Improve a Credit Report After a Bankruptcy Filing”:
How Will Bankruptcy Affect My Credit?
By Attorney Bradford W. Botes
Virtually every person who comes to see us to talk about a potential
bankruptcy filing asks us this question in one form or another. They
may have been told by a friend that bankruptcy will ruin their credit.
Another has heard that they won’t be able to get new credit for seven to
ten years. In short, most folks want to know how a bankruptcy filing
will affect their credit.
The truth is that, by the time an individual makes it into our office
to discuss bankruptcy, their credit is usually already in bad shape.
They may have gotten behind on mortgage or car payments. Perhaps
a foreclosure or repossession has already occurred. Some people have
managed to keep their credit score high, but they are simply borrowing
from one creditor to make minimum payments to another. We call this
robbing Peter to pay Paul. The credit score may be okay but the last
thing they can do, or want to do, is to borrow more money. The point
is that bankruptcy doesn’t ruin your credit; it is what has taken place
prior to filing bankruptcy that does so.