Bankruptcy and Your Credit

Contact Bankruptcy Attorney Robert P. Soto of Billmaier & Cuneo, LLC, today by calling 419.931.0067 (Ohio) or 734.568.0136 (Michigan).

A fundamental goal of the bankruptcy law is to give debtors a financial "Fresh Start" from burdensome debts. The U.S. Supreme Court addressed and provided U.S. Citizens with this option the back in 1934. The U.S. Supreme Court stated, "It gives to 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." This is a powerful statement of public policy, which has been modified throughout the years to provide further protection and guidelines to legally help and protect consumers in times of financial uncertainty.

While it is true that a bankruptcy will typically stay on your credit report for several years, paying off exceedingly large debts may take longer, if you are able to pay them off at all.

It has been reported that if you only make your minimum payment each month on a credit card, it may take 10 - 15 years to pay off that single card, which may show on your credit report long after the card is paid off. When you make the minimum payment, the credit card companies, as well as other creditors, allocate the payments on a "first in first out" basis, meaning they get their interest before money is applied to the principle balance you owe. This tactic keeps you in debt for a longer period of time while credit card companies and creditors maintain a constant profit from you.

With a bankruptcy:

• Your late payments are removed from you credit score;
  
  
• Debt Collectors must stop harassing you immediately;
  
  
• All pending litigation and judgments are immediately halted;
  
  
• Unpaid Debts are removed;
  
  
• High balances are removed;
  
  
• And you can provide notes to your credit report regarding the reason you filed for bankruptcy.
  
  

If you have filed for bankruptcy due to loosing your job as a result of the economy, due to a divorce, an illness or injury which caused you in incur substantial medical bills and costs, or any other reason, you can state the reason on your credit report.

In addition, after you eliminate your debt in a bankruptcy, your debt-to-income ratio may be greatly reduced and your credit score may increase as a result.

One of the biggest factors in deciding whether or not to file bankruptcy is to consider your future financial status if you do not file. In many cases, if you find yourself continuously indebted due to insurmountable debt, failure to file can lead to much a lower credit score in the future.

Bankruptcy can provide you with a way to get a fresh start and improve you credit score much faster than treading the financial waters. However, it’s important to remember that everyone’s situation is different. An experienced bankruptcy attorney can help you decide if bankruptcy is right for you.

It is important to note that after a discharge, it takes a strong commitment to not fall back into the same spending practices which may have contributed to a bad financial situation.

Robert P. Soto and the attorneys of Billmaier & Cuneo, LLC are committed to offering individual analyses, early assessment, efficient service and quality representation in a timely manner regarding your Bankruptcy issues.

Contact Robert P. Soto, an experienced Bankruptcy Attorney the law offices of Billmaier & Cuneo, LLC. Call 419.931.0067 (Ohio) or 734.568.0136 (Michigan).