Many people in Michigan and elsewhere disregard bankruptcy as a good form of debt relief because of how it can affect their credit rating. While it is true that utilizing bankruptcy law to get out of debt can do a number on one's credit score, it may only be a temporary problem. If gone about the right way, bankruptcy can be good for one's present situation and for the future.
Over one million Americans file for bankruptcy every year. They do it because, in the end, they believe it is the only debt relief option that will really offer the fresh financial start they desire. While so many people believe this is the worst move anyone could make, a report from LendingTree suggests otherwise.
The reason so many people want to avoid filing for bankruptcy is the kickback afterward. It can cause a person's credit score to drop, but it is believed that 43 percent of individuals who file for bankruptcy raise their credit scores back up to around 640 within a year. In just over two years, from receiving bankruptcy approval, 65 percent of filers have their credit scores back above 640. This just shows that rebounding quickly after bankruptcy is possible.
Utilizing bankruptcy law can allow a person to reset his or her financial situation. Yes, it takes hard work to build up one's credit rating again, but with debt cleared or at least now manageable it is possible to emerge from bankruptcy in a stronger economic position. Michigan residents who have concerns about how this debt relief option will affect them now and down the line can speak to an experienced attorney who will be able to answer their questions and, if deemed appropriate, help them with their bankruptcy filings.
Source: thestreet.com, "Bouncing Back From Bankruptcy -- Sooner Than You Think", Brian O'Connell, May 8, 2018