Yes, that’s right – it’s possible to file for bankruptcy even with a credit score of 700. Although these numbers vary based on financial institutions and location, a score between 690-719 is supposed to be good. But how can someone with good credit suddenly be on their way to filing for bankruptcy?
Good Score, Bad Judgment
Before knowing the reason behind bankruptcy and credit score, we must first understand how the latter works. Basically, a credit score helps lenders (like banks) determine if you’d be able to pay them. It shows responsibility and financial standing. Plus, credit scores are also a big factor when you’re applying for a loan.
In order to get your score up, you need to have early credit history AND pay your bills on time. So the higher your credit score (say, between 720-850), the lower you need to pay for interest rates the next time you charge something on your card. Let’s take a look at a real-life scenario: if you take out $15,000 to pay for new wheels on your car, and your score is somewhere around 600, you’d need to pay about $350 a month. However, if you’re score is around 800, you can get off at just $270.
As you can see, the difference in credit score could mean the difference between double shifts or a huge debt. But sometimes, fate has a funny way of playing with finances.
For example: let’s say you were diligently paying that $15,000 each month. Problem is, you keep taking out loans for various reasons. A new apartment maybe, a new wardrobe, expensive trips, etc. The truth is, even if you make on-time payments, you can still be buried in debt. Ultimately, it all boils down to bad financial judgments.
When To Admit Defeat
Lots of people can’t admit that they could be filing for bankruptcy even with a steady stream of income. Sad to say but, as long as you keep acquiring debts, those numbers would just keep on rising. Once you see loans piling up, don’t wait for collectors to come knocking at your door.
The first step is to consult an experienced financial adviser, such as bankruptcy lawyers. They know the ins and outs of dealing with debts. Many also offer free consultations, so you won’t need to worry about charges before making inquiries. Ask friends and family for recommendations; or go online to look for a local bankruptcy attorney.
The minute you realize that bankruptcy is the best option in your financial situation right now, you will feel relieved. Folks often suffer from depression because they keep issues to themselves. Bankruptcy is NOT the be all and all of life. In fact, with the right assistance, this is the perfect time for you to learn from your mistakes.
Think about it: why do so many people get into debts? Because like you, they take risks. And in the end, that is what matters most. Bankruptcy, like life, has a lot to offer if we just look at it from a different perspective. If you’re in a financial crisis right now, don’t hesitate to call a bankruptcy attorney Montgomery Al for more information.