Does Filing for Bankruptcy Damage Credit?

 Posted on August 12, 2020 in Credit Score

You have likely seen TV commercials about the numerous credit cards available or regarding where you can go to calculate your credit score. These shiny advertisements can leave many young adults applying for credit cards without knowing the impact that this can have on their spending habits. Receiving your first colorful card in the mail can quickly lead to two or three more, each with their own amount of debt steadily piling up. While these bills may seem harmless as a young, single college graduate, the debt enclosed with these credit cards can burden you for years to come. As the debt continues to increase, you may be wondering where you can turn for help. Bankruptcy is a valid option; however, its negative impact on credit scores can have most people seeking out financial alternatives first.

Sell Some Assets

The best way to get rid of debt? Pay it off. If you have any assets that you can spare, the money that you can gain from selling these valuables can help alleviate you from the lump sum sitting on your credit cards. Take to digital marketplaces, such as eBay or Craigslist, if you have any jewelry, furniture, or electronics that you are willing to part with. If you have multiple TVs, laptops, antique furniture that you have tucked away in storage, or an old necklace that you never wear, it may be best to see how much money you can earn by selling them to a new owner.

Speak with Your Creditors

Have you tried explaining your situation to your credit card company? While they hear situations like yours on a daily basis, they may be willing to extend your debt payment’s due date or build a payment plan that better aligns with your monthly income. Although it may be difficult to do, you should explain to your creditors that you are going through a financial hardship and are doing your best to avoid filing for bankruptcy. They may be able to lower your monthly payment or decrease your interest rate.

Consider Consumer Credit Counseling

If your creditors refuse to work with you, enlist someone who has a little more experience in the field. Consumer credit counselors work to negotiate with creditors. One of their jobs is to help debtors obtain a reduced interest rate or monthly payment. They will also assist their clients in creating a monthly budget to help them stay on track with their amount owed. Working with a consumer credit counselor may still negatively impact your credit score.

Speak with a San Antonio Bankruptcy Lawyer

Filing for bankruptcy is never the path that anyone wishes to take, but unfortunately, some people run out of alternatives. If you have attempted to pay off your debts using the tactics described above, it may be time to work with a reputable bankruptcy attorney. The Law Offices of Chance M. McGhee works to help their clients overcome their financial difficulties. With over 20 years of experience, Attorney McGhee takes the time to discuss the implications of bankruptcy and any valid alternatives before moving forward with the bankruptcy process. If you are unsure about how to proceed, contact our New Braunfels bankruptcy attorney at 210-342-3400 to discuss your situation in your free consultation.

Source:

https://www.thebalance.com/six-ways-to-avoid-bankruptcy-960626