Bankruptcy is a legally regulated situation in which a person or company cannot meet the payments. Many debtors in this case prefer to hide the head in sand ignoring problems.
However, the best for a borrower is sometimes to file the bankruptcy. In contrary to the common opinion you can restore the credibility if you apply to the one of the best secured credit cards issuers https://effectify.com/blog/top-4-secured-credit-cards-to-rebuild-bad-credit/ and manage to pay for debts on time.
Why Refusing to Get Bankrupt Is a Bad Idea?
Such a course of actions, however, only worsens a situation as unpaid debts increase due to charge of percent, and creditors resort to more drastic measures, for example, to cancellation of a debt at the expense of the salary or banking attachments, or to arresting on real estate. As a result, there is a paradoxical situation: because of fear to spoil the credit history debtors prefer to suffer such conditions rather, than to begin the procedure of bankruptcy though the procedure of bankruptcy is a first step on the way to recovery of credit history and recognition of the bankruptcy can be the very useful.
What Happens After You Become a Bankrupt?
Shortly after you have the first record about the payment on your card debt made on time you begin to receive offers to get the normal credit cards which are not provided with an advanced payment or deposit. It is possible that initially these offers will differ with high interest rate for loans, but as you continue to accumulate the positive credit history, the interest rate will decrease. Thus, recognition of bankruptcy doesn’t reduce dramatically an opportunity to obtain the loan if everything is done properly.
After passing the procedure of bankruptcy it is necessary to watch closely indices in credit reports. If your credit report does not reflect that debt was honored as a result of bankruptcy, you should address all credit agencies. Make sure that your credit report precisely reflects financial obligations which were repaid. Similarly, if in your report there is appeared data on debts you did not make, it is necessary to address immediately to credit agencies by mail or via the Internet to make necessary changes and to delete incorrect information.
Thus, the procedure of bankruptcy is a first step to recovery of credit history. When the credit institution estimates potential clients from the point of view of credit risks, the candidate with record about bankruptcy and practically without debts looks much more attractively, than the candidate without data on bankruptcy, but with the long list of back payments and write-offs. Analyse the old mistakes, develop the new plan of the strategy, and then move forward.