One of the most common concerns that people express about bankruptcy is that they believe it is going to ruin their credit. They worry about buying a car, buying a house or getting a credit card. They think they will never have a financial future at all if they decide to file for bankruptcy now.
Not only is this a common concern, but it's also one of the most prevalent bankruptcy myths. Yes, bankruptcy does lower your credit in the short term, but it does not ruin it forever. You could even argue that filing for bankruptcy is far better for your long-term credit than not doing so.
A better option
The reason that bankruptcy may be a better option for your credit is that you have a reason to file. You already ran into financial issues. You are already missing payments. You are already getting calls from creditors and collections agencies.
If you keep missing payments or making late payments, that's going to damage your credit score repeatedly. The whole point of a credit score is just to relate to lenders how reliable you are as a borrower. Missed payments may have a smaller impact each time, but the culmination of repeated missed payments for months or even years is going to put you in a compromised financial position and may certainly make it impossible to get the loans or lines of credit that you want.
With bankruptcy, you at least get more financial freedom and a chance to start over. You can begin repairing your credit, rather than ruining it further. You can prove to lenders that you are a reliable borrower.
How to repair your credit
There are numerous steps you can take to repair your credit score. Some of them involve simply getting new credit cards, making purchases, and then making payments on time.
Remember, you can only file for some types of bankruptcy once every seven years. The lenders know that as well. It gives them some more security, knowing you can't file quickly. They may have special cards specifically for those with low credit scores or a history of bankruptcy.
One such option is a secured credit card. This type of card requires a deposit. You then borrow against your own deposit, rather than as a direct loan from the company. Paying off what you owe increases your credit score, but there is no risk at all for the lender.
Breaking down the myths
It is very important not to let the myths about bankruptcy sway your position at all. Make sure you are well aware of all of the legal options that you have in Virginia and the steps you can take moving forward.