What is Debt Consolidation?
Learn how debt consolidation works to reduce interest rates and save money.
What Can Be Consolidated?
Types of high-interest debts commonly used.
What is Debt Settlement?
Often confused with, but significantly different than consolidating.
What Debts Can Be Settled?
Learn what kind of creditors that will often settle for less.
How Do Bankruptcies Work?
How Chapter 7 and Chapter 13 bankruptcies work, and the aftermath on your credit report.

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Clear Bankruptcy works with bankruptcy attorneys from all over the United States. Give Clear Bankruptcy a call at (866) 871-9556 or visit them for a free consultation today.

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The After-Effects of Bankruptcy

Many consumers who are struggling with debt see bankruptcy as a viable way of getting out of debt and getting an easy "new start". Despite the fact there are occasions where bankruptcy is truly the preferred (or only) choice, it's not a choice to be made casually once you mull over the consequences.

Your Credit Report:

While you may have rule out those department store and other high-interest credit cards for the rest of your life, odds are there will still be times in which you'll need or want credit. Purchasing a car, purchasing a house, leasing, renting; all these things concern your credit, and there's no other thing that appears worse on your credit report than claiming bankruptcy. This should only be used when all other methods have been explored.

When a lender is deciding whether to extend credit to a person they will typically look at the capability of the person to make steady payments based on three things; their recent income to debt ratio, overall financial stability, and payment track record. With a bankruptcy scar on your report, your stability and history won't look fine to anyone.

Your credit report can (and usually will) include details about your bankruptcy filing for up to 10 years following filing/discharge. While it's theoretically possible to secure credit after a Chapter 7 or 13, presuming your credit report is what your credit-worthiness is based off, it could be very hard if not impossible in most cases. When you decide to re-establish your credit, you'll find yourself paying "high-risk" interest rates on anything from home loans to credit cards. This could last for a period of 10 years.

Buying a Home:

Even though it's not out of the question to get a home loan following a bankruptcy, it is more tricky. Private lenders will put the borrower under harsh scrutiny except when the bankruptcy is far in the past and credit has been exceptional since. But even in that situation, it's complicated to get the same rates as someone with an identical credit score and a spotless financial history.

FHA loans usually require the borrower has built up at least 2 other credit accounts after the bankruptcy, which have to be in perfect standing. The borrower ought to also wait a period of at least 2 years after discharge for Chapter 7's or one year after Chapter 13's. VA loans typically necessitate a 2-year period of great credit after discharge too, though extenuating circumstances may be considered.

Alternatives to Bankruptcy: Due to the damaging consequences and recently tightened laws, debt consolidation is a viable option for home owners, in addition to debt settlement or a combination of the two.

Considering Bankruptcy?

Clear Bankruptcy works with bankruptcy attorneys from all over the United States. Give Clear Bankruptcy a call at (866) 871-9556 or visit them for a free consultation today.