Economic troubles that have plagued homeowners have led some to file bankruptcy as a way to remove the crushing burden of various debts from their life, but when it comes to a consumer who has faced bankruptcy, there are a great deal of obstacles that must be overcome before a consumer can set themselves back on a more positive financial foundation. Yet, there are numerous consumers who are attempting to improve their bad credit score after the stain of bankruptcy has been a setback for their personal financial goals, and while this process may take some time and effort, there are basic aspects of a credit history that a consumer must review before beginning this process.
While looking over a credit report is always a good starting point for anyone who is attempting to repair a poor credit score, when bankruptcy is in place this particularly proves to be necessary as there are some errors on a credit report they can prevent a consumer from moving forward in the bad credit repair process. Obviously, if a consumer has paid off a debt that has not been removed from their credit score, this could cause complications in terms of lowering their credit rating or simply putting them in a position where they are having to overcome a much lower score, but bankruptcy can bring problems in this area as well.
As an example, there have been consumers who are facing issues where they have filed for bankruptcy, which will obviously show up on their credit report, but certain debts that were discharged during the bankruptcy process may not have been reported as such on a consumer’s credit history. This could lead to issues where, if certain debts are not reported as being discharged, a consumer may find that it looks as if they have continually missed payments on a particular debt which they previously thought was no longer an issue after bankruptcy.
Obviously, bankruptcy should be a last resort for any consumer and not viewed as an easy out when debts have become problematic, as there are solutions that can be less detrimental to a consumer’s credit score which should be explored first. Some individuals have been able to benefit from simple counseling, while others may have had luck with a debt management plan, which will lower the minimum amounts they pay each month on certain debts, but even programs as severe as a debt settlement plan may need to be explored before bankruptcy. There are some cases though, where debt settlement and bankruptcy may cause a comparable amount of damage to a consumer’s score, so addressing debt obligation problems early will obviously be more beneficial for a consumer, particularly if they will be in a position where bad credit repair will be necessary.
The take away point here is that consumers who have filed bankruptcy must make sure that everything lines up on their credit report, in terms of what has been discharged, as getting back on one’s feet financially is no easy task, so if aspects of a mistake on a consumer’s credit history, like reports of continued missed payments even after bankruptcy has been filed are present, consumers must deal with these problems quickly so that they can truly begin reestablishing their credit score.