Can Bankrtupcy Actually Improve Your Credit Score?

While it is true that filing a Chapter 7 is the worst thing that an individual can do to their credit score, the damage may only be temporary.  On more than one occasion I have had clients that in 18 months of Chapter 7 to discover that their credit score was higher than before filing bankruptcy.  How is this possible?  If you are in a financial situation that has you over due on all your credit card bills and with a stack of civil judgments against you for not being able to pay your bills, then you may be able to improve your credit score long term by completing a Chapter 7.  The reason is that often in these situations, your debt-to-income ratio is almost all debt and no income.  This is a major factor in determining your credit.  Additionally, once you file there will be other credit offers being made to you that could help re-establish a positive payment history with credit.  However, I always strongly advise against taking on new credit cards and other debts after completing a bankruptcy.  If you would like to meet and discuss your options to get debt relief, then call the Law Offices of Andrew E. Farmer at (865) 428-6737.  Our licensed attorneys practice in Sevier, Knox, Blount, Jefferson and Cocke Counties.