Anonymous
Anonymous asked in Business & FinanceCredit · 1 decade ago

Is cleaning up your credit, consist of filing banckrupcty. Im thinking of repairing my credit?

so Im wondering is filing banckrupcty the same as getting rid of bad credit or I would have to take care of those old depts??

Update:

debts* error

7 Answers

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  • Anonymous
    1 decade ago
    Favorite Answer

    Depends on your situation. There are two options, one of which is bankruptcy where you effectively pay next to nothing against your debts. The other is arranging a Individual Voluntary Agreement where you pay more to your debtors via an insolvency agent/accountant and they appoint a supervisor to whom you make your repayments. The IVA has to be agreed to by all debtors but they get more money via an IVA than a bankruptcy. The accountants then disperse those payments to your creditors. Either option damages your credit rating for several years.

    Source(s): My former husband declared bankruptcy which caused me knock on problems. I opted for the IVA as I wanted to pay back as much as I could. My credit rating was shot for 5 years but after that it was fine.
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  • 1 decade ago

    Filing bankruptcy worsens your credit, since it drops your score about 200 points and stays on your record for at least 7 years. Depending on what type of bankruptcy you file, it can eliminate your debts (along with all your assets).

    Cleaning up your credit consists of paying off old debts, bringing current debts to on-time and paying future debts in a timely fashion.

    The process can be long and slow either way you go, but by paying your old debts off and becoming current on all existing and any new debts, you have a better chance of repairing your credit sooner.

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  • jojo
    Lv 4
    1 decade ago

    Bankruptcy stays on your credit for 10 years and it will affect you getting any loans. I would say that should be your last resort. Contact your creditors and explain your situation and ask them for help. I did this two years ago and I am almost rid of my debt now. This website really helped me. They have a lot of information and letters that you can use to send to your creditors. Try to take care of your debt before just filing for bankruptcy. http://www.debtconsolidationcare.com/

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  • 1 decade ago

    bankruptcy will wipe out credit card debts and help you get a fresh start..

    it will b on your credit report for 7 years..

    it doesnt ruin your chances of getting loans and such in the future..

    my ex filed bankruptcy and a year later got a loan to buy his mobile home and received credit card offers..

    (once you go through bankruptcy it means in the future you have to pay for what you borrow)..

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  • 1 decade ago

    The best thing you can do, it's openning secure credit card with above $1000 limits and pay off it every month.

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  • Ryan M
    Lv 7
    1 decade ago

    Bankruptcy will KILL your credit for 7 years. In the eyes of someone who is looking to lend you money, having a bankruptcy on your credit report is the ULTIMATE form of "bad credit"

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  • paapaa
    Lv 6
    1 decade ago

    the only way to clear it up is to pay off your debts.

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