Erase Bad Credit – Is Filing Bankruptcy The Best Way?

To erase bad credit, chances are you have considered filing bankruptcy so you can start over with a clean slate. As tempting as this theory sounds, bankruptcy should be taken very seriously and should be considered a huge financial commitment. Like all financial decisions, using bankruptcy to erase bad credit has both negative and beneficial consequences.

Bankruptcy is more than simply wiping your credit report clean. There are many different types of bankruptcy and before making any final decisions or commitments it is important to know your options.

Most individuals who file for bankruptcy will file under what is referred to as Chapter 7. This type of bankruptcy, in addition to helping erase bad credit will allow an individual to keep certain assets. Which assets you are able to maintain is dependant on your own personal financial situation and the laws in your area of residence.

There is also Chapter 13 bankruptcy which is essentially a court approved re-payment plan. This type of bankruptcy will generally be filed by individuals who, though they have a dependable income, feel that they are not moving forward or making any progress as far as their debt payments are concerned.

One of the greatest benefits to filing bankruptcy is that it eliminates the stress caused by the constant phone calls and threatening letters of collections agencies. If someone has filed bankruptcy, creditors are no longer allowed to call or contact you anymore, under any circumstances. This is possibly one of the most common reasons why so many Americans file every year.

If you are looking for a way to erase bad credit and start life over with new opportunities, seek the guidance of a licensed bankruptcy lawyer. Your goal of living a debt free life may be closer than you think.