credit counseling | Georgia Bankruptcy Blog

Bankruptcy Can Save Your Credit!

Posted by Bryce Angell on Wed, Jan 28, 2009 @ 10:55 PM

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At first glance of the heading many people may think there is a typo in the title of this blog. Well, not so fast. As the economy continues to take a dive many people are falling into debt they can no longer manage. The want to do their best to pay their bills but the numbers are stacked against them. Making minimum payments on credit cards with interest rates in the 20-30% range will be futile. Many debtors embrace the promises of late night infomercials that claim their debt can be negotiated for less than half of what is owed and all of their financial problems will be wiped clean. Wrong! Wrong! Wrong!

The truth is that most people who start such a program end up further in debt and the only bill paid is that of the credit counselor who answered the late night call for help. Although it is possible to settle debt with creditors for less than the amount owed, most subscribers to the debt consolidation programs end up not being able to finish the payment plan. And for those that do, still more disapointment. The problem with negotiating a payoff with a creditor for less than the amount owed is that the creditor will be reporting the negotiation and settlement to the three credit bureaus for many years to come, making it very difficult to re-establish credit. Unfortunately for these debtors, they never considered bankruptcy as a viable option because of the stigma attached. Most people believe filing bankruptcy ruins their credit permanently and leaves no room to re-establish credit. This is a common misnomer and heres why.

Once you file bankruptcy and all unsecured debt is listed in the petition to the bankruptcy court, that debt is discharged completely at the end of the proceeding. This discharge prohibits creditors from all collection attempts and prevents further reporting to the credit bureaus. True the bankruptcy remains on the credit report for some time, but the debtor can now begin rebuilding credit. Just because the bankruptcy exist on the credit report does not mean the debtor can't begin raising his/her fico scores. The net effect of a bankruptcy versus a credit counseling plan will yield a much faster recovery for the debtor. Please don't fall into the credit counseling service trap and call us today to find out more about how we can help you. Call for a Free debt evaluation at 800-959-9132

The Law Offices of E.W. Chip Angell PC in Georgia have been helping thousands of people in Georgia who have become overwhelmed with debt and don't know where to turn. We can help you stop creditors and get a fresh start. Call us for a Free consultation at 800-959-9132