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Paul Yamilkoski

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Bankruptcy Ruining Your Credit?

I get many people, including lenders and realtors that get confused about Bankruptcy and how it affects your credit score. It is understandably confusing. We know it is supposed to give you a clean slate, so expect that once the BK is discharged, that everything is clean, but it is not.

When the subject of Bankruptcy comes up I first want to assess if it is even necessary or appropriate. I have had people say they need to file BK when they only have two accounts, with balances that ate not huge, getting out of control and everything else they have going on is in good shape. That would not be the first thing I would consider and I am always glad to be able to talk to them and guide them before they make a rash decision that could be devastating in the short term.

One client I had, in that very situation, with a little guidance and effort, was able to get those accounts back under control and have loan ready credit within a matter of months. He had a new home within ten months. We saved him the two years or more that a bankruptcy would limit him for, and he also escaped the cost of the BK and the damage that it would do to all the account relationships he had that were is good standing.

Bankruptcy has a very important and appropriate place in in the scheme of finances, but when to use it is a very big and important thing to evaluate before actually doing it.

After people have been through a bankruptcy, their credit report is usually a disaster. Most people don’t expect this because they think they have a clean slate and it should all be gone, but it is not.

I have worked with many clients that, when we looked at their credit reports after the bankruptcy was discharged, had several accounts reporting on their credit report that were not included in the BK as they should have been. In some cases the lawyer was not very diligent, did not ask the right questions, or the client did not give the lawyer accurate or complete information to do a good job. Luckily the clients were able to go back to their lawyer and get that changed.

Very commonly after a bankruptcy, the majority of the accounts that were included in the bankruptcy are still reporting as if the BK never happened. This is really bad for your credit, because the bankruptcy will be reporting and hurting the scores significantly and all the accounts that have not been getting paid for the time prior to the BK and during the process leading up to the bankruptcy being discharged, are still showing delinquent and actively in collections or default and late history is continuing to accumulate.

In other cases, the accounts included in the bankruptcy are still showing balances, or their rating is still as a charge-off or collection, or the date of last activity (DLA) has changed to be more damaging. These are just some of the many problems that show up on credit reports of people that have been through bankruptcy, and they have a very damaging affect on the credit scores and how lenders will look at those clients.

I am surprised how often when I talk with lenders and realtors, that are working with clients that have been through a bankruptcy, that there is a perception that there is not much that can be done to help those clients, that those clients will have to wait things out before they can see any improvement and get a loan.       images

I am always thankful that I am able to help speak hope and optimism into those circumstances.

The reality is that there is a great deal that can be done for those clients. They just need to get the right help. That is the message I want to get across here today.

A reputable credit restoration company like Heartland Credit Restoration can be a great resource to help determine if looking at a bankruptcy is potentially the right thing for you, help you to understand your options and the potential affect of each option on your plans and your credit, and could save you a lot of money and time trying to get things on track.

If you, someone you know or a client you are working with has been through a bankruptcy or is even thinking about filing, ask them if they would offended if you passed their contact information to me. I can give them a free consultation to help them asses their situation and help them get pointed the right way. If they need help restoring their credit, I can guide them in getting that help as well. My number is 319-533-5236.

We at Heartland Credit Restoration want to make a difference for you and every prospective client we encounter. We want to leave things better than we found them.

I welcome your comments and and questions and encourage you to share this information with your contacts on social media.

If you are finding you have some problems with your credit scores or other elements of your credit, a reputable credit restoration company like Heartland Credit Restoration is a great place to turn for help. We at Heartland Credit Restoration care about your future and are all about helping people get positive control over their credit and realize their dreams.

If you  have a client that you are going to have to turn away due to credit challenges, then I encourage you to give me a call. We can look at how Heartland Credit Restoration might be able to help you turn things around and get that credit loan ready. There isn’t a better company you can go to for help.

I will look forward to talking to you and I hope you have a wonderfully blessed day!

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