What If I File BK?

How to re-establish credit

Many people are being pressed financially at this time more than they have ever been pressed before. S&P downgrades on our Federal Government not withstanding. I am asked at least three times per week, "what happens to me if I file Bankruptcy?"

Well.....it depends. First of all, your credit score will drop dramatically. All your well paid credit card accounts (if any) will be closed and shut down. Your score will remain low for 12 months and begin to trickle up if.....and it is a big if.....you get re-established credit asap.

The BK record will remain on your credit for 10 years. All future employers, lenders, etc. will know about the BK. The credit scoring will be impacted for 3-4 years but if someone takes the correct steps the score can improve quickly.

Obtaining a mortgage will be limited to FHA loans and those after 24 months from discharge. For conventional loans, 3-4 years depending on the lender. If a house is included in the Bankruptcy, then you must wait for 4 years beyond the Sheriff sale.

Still with all these challenges to your score and credit, I have recommended bankruptcy more in 2011 per client than at any other time I can remember in my 28 years of mortgage banking experience.

We are indeed in some challenging times. Our Federal Government isn't listening to the public. The public has stopped free spending. Businesses have stopped hiring. Everyone is waiting for leadership.

Leadership anyone? Anyone? Buehller?

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