Bankruptcy is commonly considered to be a financial disaster that’s very hard to recover from. However, new data from financial experts shows that this may not be the case for all debtors in Tennessee. Nearly half of Americans who file for bankruptcy have their credit scores rise dramatically just a few years after filing. In addition, people who went through bankruptcy and raised their scores found that they could get similar mortgage and car loan rates to regular borrowers.
According to financial advisers, the key to rallying from a bankruptcy is to learn from the mistakes that created the problem in the first place. Once someone carefully considers their financial history, they can start looking forward. Building a good credit score is about paying bills on time and managing debt responsibly. There are many resources and tools available online to accomplish this goal.
Bankruptcy disappears from a person’s credit report after seven years, and its impact on a credit score goes down over time. During the seven-year period, individuals should carefully budget their finances in order to develop positive habits. If a person only spends what they have, they can develop a positive credit history relatively quickly. Focusing on needs rather than wants can help with this process.
When someone is burdened by an unmanageable amount of debt, Chapter 7 bankruptcy may be the best option for a full financial recovery. A bankruptcy lawyer can provide the legal means to file and help create a path forward that leads to greater financial well being.