credit score From Our Springfield Bankruptcy Attorney

Groce & DeArmon Explains How Bankruptcy Affects Your Credit Score

June 23, 2020 By Groce & DeArmon

Filing for bankruptcy is not a decision to make lightly. It’s stressful to deal with mounting debt, but it’s also stressful to deal with the consequences of bankruptcy. You may be worried about your credit score since a bankruptcy stays on your credit report for seven to 10 years. In today’s blog from Groce & DeArmon, P.C., we discuss how bankruptcy affects your credit score.

Bankruptcy Doesn’t Ruin Your Credit Forever

In reality, most people’s credit scores see positive upward movement as soon as six months after a bankruptcy. The key is how well you handle paying creditors during the bankruptcy process. Groce & DeArmon, P.C. can explain what lines of credit you can and cannot eliminate in bankruptcy.

What Discharging Debt Does to Your Credit Score

Your credit score indicates to creditors how much risk you represent as a borrower. Post-bankruptcy, your credit score will be affected by the terms of your bankruptcy filing, how recently it was filed, and how you’ve handled payments since then.

Defaulting on several accounts with large balances has a greater effect on your credit score compared to defaulting on smaller debts. The ratio between discharged (negative) accounts and positive accounts may also affect your credit. The bankruptcy attorneys at Groce & DeArmon, P.C. can give you tips and tricks about how to go over your credit report to see what may happen once a discharge takes place.

Credit Score Isn’t the Only Factor

One thing to remember about credit and lending is that your credit score isn’t the only factor that lenders take into account when determining how much to loan you. You may still be able to get a small line of credit a few months after a bankruptcy, but it may be at a higher interest rate and a lower credit limit than before.

Start Building Credit ASAP

Filing for bankruptcy does lower your credit score, but you can start building a credit history immediately following the bankruptcy. Consider adding new credit, such as secured credit cards or small installments, to counter any negative information on your credit report. Make payments for these loans on time. Keep any credit card balances under 30% of your credit limit.

Making regular payments on time is the only way to improve your credit score. Yes, a bankruptcy will lower your credit rating. However, it’s not necessarily a dire situation. Groce & DeArmon, P.C. can talk to you about how to improve your credit score following a bankruptcy filing. Bankruptcy will stay on your credit report for seven to 10 years, but the impact will lessen over time as you make regular payments to your existing debt.

Call Groce & DeArmon, P.C., About Bankruptcy Protection

Do you feel overwhelmed with your current debt load? Are creditors constantly contacting you at home and work? Chapter 7 or Chapter 13 bankruptcy may offer a solution for you. Contact Groce & DeArmon, P.C., or call toll-free 1-800-640-3706 in Missouri or 417-862-3706 for more information or a free consultation about filing for bankruptcy.

Myths You Need to Know About Filing For Bankruptcy

July 8, 2019 By Shari DeArmon

Filing for bankruptcy can seem like a desperate decision for getting out of debt that leaves many people feeling embarrassed. Because of this, there are many myths associated with filing for bankruptcy that are simply wrong. In today’s blog, bankruptcy attorneys Groce & DeArmon clear up some of this uncertainty by debunking myths associated with filing for bankruptcy.

Myth 1: It Will Ruin Your Credit Score Forever

One of the myths associated with bankruptcy is that it will destroy your credit for seven to 10 years. In reality, most people’s credit scores rebound within six months after bankruptcy is finalized. And in some cases, credit scores improve greatly after bankruptcy. Doing the right things to restore your credit like getting a secured credit card can help you get on the right track to a fresh financial start.

Myth 2: You Will Lose Everything

Many people believe that you will lose everything if you file for bankruptcy, including your car, your house, and whatever other assets you own. This is simply not true! Most Chapter 7 bankruptcy cases offer exemptions that allow you to keep your belongings up to a certain value.

Myth 3: Paying Off Debts Is a Better Option

Filing for bankruptcy isn’t necessarily a bad idea. In fact, if your debts are more than 50% of your annual income and you are not likely to pay them off in the next five years, bankruptcy is probably your best option. The immediate and long-term relief that you can achieve through bankruptcy oftentimes outweigh the downsides.

Myth 4: All Of Your Debts Will Be Forgiven

While it is true that many of your debts can be discharged or forgiven in Chapter 7 or Chapter 13 bankruptcy, it is important to remember that there are some debts that are less likely to be discharged. In general, this includes debts that you are personally responsible for like taxes, child support, student loans, and debt from fraudulent cases.

Myth 5: Filing For Bankruptcy Makes You a Failure

Some people believe that filing for bankruptcy is an embarrassing personal failure. In reality, many people file for bankruptcy as a result of situations out of their control, like medical bills or stagnant wages. Even if you are filing for bankruptcy because of mismanaged finances, it is important to remember that bankruptcy is a responsible step in the right direction to fix your financial situation.

Bankruptcy Resources at Groce & DeArmon

If you find yourself in a difficult financial situation and want to learn more about how bankruptcy can help you, bankruptcy attorneys Groce & DeArmon can help clear up some of the myths you have heard about bankruptcy. With 30 years of experience in Chapter 7 and Chapter 13 bankruptcy cases in southwest Missouri, we can help you find a fresh start. Start by scheduling a free consultation. You can call us at 417-862-3706 or visit us online to learn more.

Bankruptcy Lawyer Advice: How to Build Your Credit After Bankruptcy

December 14, 2016 By Shari DeArmon

When you’re living with debt, your credit score probably seems like it’s in dire straights. The good news is, you’re not doomed to bad credit for the rest of your life. Bankruptcy clears your debt and essentially gives you a clean slate. From here you can start to slowly rebuild your credit score through several methods.

A bankruptcy lawyer at Groce & DeArmon, P.C. can help you take that first step by getting you through the bankruptcy process. Filing for bankruptcy can be stressful and a bankruptcy lawyer can help ease the stress. Once they do what they do best, you can start to get your credit back on track.

Check Your Credit Score

The first step is the scariest part, but don’t cover your eyes. Finding out your exact credit score will give you an idea as to where you’re starting. There are plenty of free ways to check your credit score, so there’s no excuse not to see where you stand. Some of these credit score apps can even suggest credit cards that you may be eligible for. If you don’t know how credit scores work, these apps can usually give you an idea of what is going on with your score.

Apply for a Secured Credit Card

The easiest way for you to start rebuilding your credit is to make payments on a credit card. Many people think that bankruptcy will bar them from being able to get loans or cards from lenders. You actually have a much better chance with lenders after bankruptcy than when you’re still in debt. Since you have the slate clean, they know you’re more likely to pay than when you had other debt obligations. Also, they know you won’t be able to file for bankruptcy again for quite some time.

Be prepared for higher interest rates and lower credit limits, but that’s what comes with rebuilding your financial status. Luckily, the higher interest rates shouldn’t concern you as much because you should be planning to be responsible with your payments. Only use your card for a few purchases a month, and then pay off your bill. Slowly but surely your credit will start to build again. Remember, bankruptcy leaves your credit report in 10 years, so do your best to build your credit in that time.

A Bankruptcy Lawyer Can Help You Leave Debt Behind

If you have massive, crushing debt and you’re afraid that you’ll never escape, a bankruptcy lawyer can help. Here at Groce & DeArmon, P.C. we will assign you a bankruptcy lawyer to help you start getting your life back on track. You don’t have to live with debt and bad credit forever. To set up a free consultation with a bankruptcy lawyer, contact us today. We look forward to speaking with you.

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