How Does Filing Bankruptcy in Arizona Affect My Credit?
Posted on behalf of Phillips Law Group on May 03, 2010 in Local
Many people who feel as though they are being buried in debt, inundated with collection calls and letters and who are constantly lacking the money to even pay their basic monthly bills also feel that there is no way out from under the stress and fear that dominates their daily lives. As important as money is to our way of life, it's not a reason to allow yourself to suffer endlessly, as there are options available to those who need them. One of those options is filing for bankruptcy, but that should only be done after a careful review of your finances by a skilled Phoenix bankruptcy lawyer. He or she will be able to provide you with a clear picture of how to proceed and answer your questions, including how filing for bankruptcy in Arizona could affect your credit. Below is a brief overview of this common question.
The Current State of Your Credit Rating and Arizona Bankruptcy
While no two financial situations are ever exactly alike, it's likely that if you are already experiencing serious financial problems that your credit rating is already in a state of disrepair. Generally, negative entries on your credit history will remain on your report for seven years, but that seven-year period could only begin to run after you've closed out the active accounts that are in collection. In short, as long as you are behind on bills and are dealing with collections, those entries will remain open and continue to stain your credit history and affect your overall score in a negative way. Fortunately, there are ways to 'start the clock' on removing these items from your history.
Arizona Bankruptcy Gives You and Your Credit Rating a New Start
If you file for bankruptcy in Arizona and the case proceeds as it should, your debts will ultimately be discharged, which means they'll be removed from active repayment/collection status. Once these debts are closed out in the eyes of the law, they are no longer active and the clock begins to run on those seven years of history. Therefore, filing for bankruptcy protection in Arizona can actually improve a credit rating for many people, as they will no longer have active collections on their histories.
However, as stated above, every individual situation needs to be properly analyzed before this question can be answered with specificity. If you'd like to begin the process of putting an end to your financial troubles, you need to contact the Phoenix bankruptcy lawyers at the Phillips Law Group today to schedule a free initial consultation.