Why do my friends and family tell me NOT to file bankruptcy and that I will be denied credit for 7 - 10 years?
Your friends and family mean well, but if they give this advice, they know nothing about bankruptcy. They may even have filed a case in their past and had a bad experience. Maybe they entered into a 13 and did not make payments, their case was dismissed, and possibly lost their home because they could not afford to pay for it. They may not have been advised properly to file a Chapter 7 after this to clean up their credit since they would have a “dismissed” 13 on their report, a foreclosure and nothing showing after that to get rid of these debts. By their case not succeeding, by not filing a follow-up Chapter 7, or by not re-establishing any good credit, they may be suffering a bad credit score.
After going through this experience, that friend or relative may then say to you “Don’t file a bankruptcy…it ruined our credit.” The bankruptcy did not ruin their credit. Their defaults ruined their credit. Frequently it is the case that they simply needed to rebuild their credit by filing a 7 if they could not afford to pay for their home in another Chapter 13.
Getting their bankruptcy discharge would help them re-establish a responsible credit rating and help them quickly move on to great credit score. Or, your friends and family may be listening to their friends who believe the false accusations about bankruptcy being spouted by “consolidators”. Again, our family and our friends mean well, but many are misinformed about bankruptcy.
Lee Abt is an Experienced Bankruptcy Lawyer in New Jersey - Call Today!