Numerous Illinois residents are struggling financially due to job loss or lack of sufficient income to pay their debts. In order to help their economic situations, some will turn to Chapter 7 bankruptcy to clear their debts and achieve a fresh start. While there are those who would advise against this due to the impact such a filing can have on one’s credit score, a recent report suggests that filing for bankruptcy really is not the end of the world.
Following a Chapter 7 bankruptcy, the filing will remain on one’s credit report for 10 years. That sounds bad, but according to LendingTree, a little over 40 percent of bankruptcy filers are able to raise their credit scores back to 640 within a year of bankruptcy approval. Roughly 65 percent of filers are able to achieve credit scores over 640 in a two-year period.
Why does this information matter? Those who are against bankruptcy want people to believe that it will ruin one’s credit forever. However, this simply is not the case. With hard work and dedication, it is possible to build one’s credit rating again.
A Chapter 7 bankruptcy, if approved, can clear a lot of one’s debts. Not all debts are dischargeable, but items like medical bills, credit card balances, and auto and home loans can be wiped clean, granting one a clean slate. Without this debt, Illinois residents can begin to rebuild their lives and reshape their financial futures. Those who are considering bankruptcy can turn to an experienced attorney for help with the matter.
Source: thestreet.com, “Bouncing Back From Bankruptcy — Sooner Than You Think“, Biran O’Connell, May 8, 2018