Bankruptcy Articles

You’ve found yourself in debt and now it’s time to take a practical look at your situation. There are many types of debt, including credit card bills, medical bills, mortgage, automobile loans, household bills, education loans, and alimony or child support payments.

At this point, it doesn’t help to wonder how you got into debt, it’s time to determine how you are going to get out of debt, how this debt is affecting your financial credit score and what steps you will take going forward to make sure this will not happen again.

One way to eliminate debt is to choose bankruptcy. While once thought of as unthinkable, the word “bankruptcy” is now more commonplace than ever. Everyone is feeling the squeeze of the economy and those who choose bankruptcy are actually on the road to recovery.

An important consideration for those in debt is what your situation is doing to your financial credit score. Credit scores are frequently called “FICO scores” since most credit bureau scores used in the United States are produced by Fair Isaac and Company, or FICO. FICO scores are provided to lenders by the three major credit reporting agencies: Equifax, Experian, and TransUnion.

A FICO score measures your creditworthiness. The score can range between 300 and 500. The higher the score, the lower the risk. Specifically, borrowers with high FICO scores are generally less risky borrowers than those with low scores. They are more likely to pay off their debt and not default on a loan. The score is based on many factors, including payment history, outstanding debt, length of credit history, negative credit information such as bankruptcies and collections and the amount of credit used vs. the amount of credit available.

Each of the 3 credit reporting agencies may report different FICO scores for you. The agency only regards the data in your credit report at that agency. If your current scores from the three credit reporting agencies are different, it’s probably because the information those agencies have on you is different.

Bankruptcy attorneys can help you see past your current debt situation. They have many bankruptcy debt resources at their disposal, including a credit score prediction tool, to help you see and understand your present credit score as well as a projection of what your score will be subsequent to filing bankruptcy. There are many factors to take into consideration when determining the best route for you to get out of debt. Be sure to utilize all your resources and become an informed consumer before making any decisions.

Filed under: Debt