Tips On Recovering From Filing For Bankruptcy
As the recession gets worse, more and more Americans are falling into debt, and more of us are declaring bankruptcy every day. Bankruptcy can be seen as a fresh start, relieving you of much of your debt and payments, but it will also tear up your credit score, staying there for ten years, and decreasing it by several hundred points. In most cases, bankruptcy should be viewed as a last resort because of how important it is to maintain a healthy credit score. If you are forced to file for bankruptcy, there are certain measures you should take to ensure that you can get on the road to financial recovery as quickly as possible.
Credit Scores 101
What is a credit score? Good question. A credit score, sometimes referred to as a FICO score is a numerical representation of information that is located in your credit report. A whole bunch of data is collected about you and how you handle your finances, and it is expressed through this number. FICO credit scores look a lot like SAT scores and range from three hundred to eight hundred and fifty. These scores are incredibly powerful. In the last year alone, twenty five billion credit decisions were made based on FICO scores.
What Is Bankruptcy And What Do The Chapters Mean?
Bankruptcy in the United States is a constitutionally (Article 1 Section 8, Clause 4 to be exact) approved way for business entities and individuals to settle big amounts of debt. Congress is in charge of making the bankruptcy laws. The most recent change was an amendment to existing laws through the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. For other laws relevant to bankruptcy, turn to the United States Code.