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Don't Ask A Bankruptcy Attorney What Effect A Bankruptcy Will Have on Your Credit!

By Joseph McDaniel, Esq.

Let's consider this for a few moments.

If you need to file a bankruptcy, you need to file a bankruptcy.

If you need to file a bankruptcy, you are often the subject of a trustee's sale, a lawsuit or five, and at least a million harassing creditor phone calls.

Do you think you have good credit after you start getting the phone calls from credit card companies? Or after your first lawsuit? Or after the trustee's sale gets going?

Now, I'm not a credit expert. There's enough for me to try to stay current on in connection with Arizona Bankruptcy Law without trying to learn an entirely separate and different area of law.

And I don't want to be a credit expert! My clients have told me, over the years, how much they hate the companies that they have hired to do credit cleanup, and I don't want to be hated! They hate the companies that do credit cleanup, by the way, because they take too much time and do an inadequate job, at least according to my clients.

But I know this much about credit: the rules change from time to time, and the fact that you need to file a bankruptcy means that you need to file a bankruptcy (I have talked from time to time about the Joseph C. McDaniel Rule of Bankruptcy Inevitability in this blog).

Everybody has emotions about something (you heard it here first).

With some folks, it's the diamond ring. With some, the Harley-Davidson. With some, the house (fewer of those lately; I think people are figuring out that a long term commitment to a house that will always be underwater makes little economic sense).

And some people have emotions about their credit scores.

Many people start their discussions with me by telling me how much they used to make and how high their credit scores used to be.

And I usually tell 'em it doesn't matter; I love 'em no matter how much they make, and no matter what their credit scores may be.

But instead of fearing the result if you file a bankruptcy, displace fear with knowledge!

Spring for a few books on Amazon about how to clean up your credit, and figure out how long it takes after a bankruptcy to get great credit.

Clients coming back after their bankruptcy discharges have told me that it took them about a year to get a score high enough to get a great rate on a car, and others have told me that it took them two years to be able to get a new mortgage.

That may have changed, because the rules change.

But if those are important to you, talk to a car salesman and then to a mortgage broker, bearing in mind that they use (shudder!) closing techniques, and they'll try to sell you stuff just because you're standing next to them; they can't help it!

Or go to Amazon and get ten books on credit repair, and replace your fear with knowledge!

Full post as published by Arizona Bankruptcy Attorney Blog on December 08, 2010 (boomark / email).