For many people, ‘bankruptcy’ may seem like a bad word.
It has a cultural stigma associated with failure or poor financial decisions. For those who’ve gone through a bankruptcy, they’ll tell you: it’s takes time, effort, and plenty of cutting through bureaucratic red tape before it’s possible to return to a sense of normalcy again.
At Matthew R. Osborne, PC, we understand that getting through a bankruptcy is a slog. It’s difficult, time-consuming, and often very humbling.
There’s a good reason for this, however—bankruptcies are meant to protect individuals and businesses from eternal indebtitude. And, when the federal government accepts a bankruptcy filing, they do so with the intention of imparting an important financial lesson. That lesson is to stay solvent.
For many people and businesses, market forces, disruptions in the economy, and other factors can often force their hand into filing for bankruptcy. This is completely understandable, and it’s the reason why the option of bankruptcy is there in the first place.
If there was no way to file for bankruptcy in order to resolve insurmountable debt, then those who fall into critical arrears would stay there.
Recovery from Bankruptcy
It’s enough to have to deal with the label of ‘bankrupt’ when starting down the long road of recovery, but it’s another thing altogether to try and work with the credit reporting agencies to have a bankruptcy accurately represented on a credit report.
If you’ve filed for bankruptcy and are in the process of recovering from it, there are a few important facts you should know:
- You still have rights as a consumer. Regardless of your financial condition at the time of your filing, you still have the right to work hard to repair your credit profile. There is no law preventing you from making a full recovery from a bankruptcy, even if that takes a decade or longer.
- A credit reporting attorney can help you. The three main credit reporting agencies—Experian, Transunion, and Equifax—are unfeeling, unapologetic, draconian organizations that are not especially motivated to make sure your bankruptcy filing is accurately represented on your credit report.
This is why it often takes the heavy hand of a qualified credit reporting attorney like Matthew R. Osborne to act on your behalf in order to restore your credit rating.
- There is light at the end of the tunnel. No matter how much debt you managed to accrue or how many different creditors were knocking at your door, a bankruptcy filing gives you the chance to start over. Everyone deserves another opportunity at financial success, including you.
Make no mistake, recovering from a bankruptcy is time-intensive and sometimes very frustrating. Because the laws regarding bankruptcy are complex, it can be difficult knowing where to turn for help in dealing with the credit reporting agencies.
When the time does come to get out from underneath the 7- or 10-year bankruptcy ding on your credit report, we can help.
Chapter 7 or 13—Does It Matter?
Regardless of whether you filed or are currently filing under Chapter 7 or 13, you’re going to have to contend with at least seven years of ‘derogatory’ credit. In case you’re wondering, Chapter 11 bankruptcy is reserved for businesses, not individuals.
Under a Chapter 7 bankruptcy, liquidation of assets is typically required before the filing is complete. The proceeds from the liquidation are used to pay off debtors, and only then is the resulting debt balance dissolved by the court.
Chapter 7 bankruptcies will stay on your credit report for ten years.
Under a Chapter 13 bankruptcy, the debtee is given the opportunity to ‘reorganize’ their financial house, a process that often involves a court-ordered repayment plan. If this payment plan is satisfactorily completed, there is no forced sale of assets.
Chapter 13 bankruptcies will stay on your credit report for seven years.
At the end of the day, when it comes to restoring your credit rating, it doesn’t matter whether you filed under Chapter 7 or Chapter 13. As long as sufficient time has passed since your filing, and as long as the court-ordered requirements have been met, you should feel empowered to a full restoration of your good name in credit.
The Law Offices of Matthew R. Osborne, PC work hand-in-hand with consumers to get them back on track, credit-wise. We know the law pertaining to bankruptcy, and we specialize in representing consumers who are ready to prove to the world that they’re credit-worthy, even after having dealt with a bankruptcy.
To learn more about how we can help you, contact us to schedule a consultation.