File Bankruptcy And Boost Your Credit Score! Part 1: Statute Of Limitations
Even if the statute of limitations has run on all of your credit card bills and other debts, you still may want to consider filing for bankruptcy. While it’s true that the main purpose of bankruptcy is to protect you from your creditors and give you a fresh start so you can leave all that bad indebtedness behind, there’s a second, and for many people, even more important benefit that you get from bankruptcy which is that it helps you rapidly clean up your credit report. So, let’s say you’ve got a bad credit debt and every month the credit card company is reporting that you’re delinquent and that you’re late or that it’s been charged off. All of these negative reports really beat up your credit score and drive it all the way down. When you file bankruptcy, the bankruptcy wipes away all of that bad credit reporting and allows you to have a fresh slate on your credit report so most of my clients report that pretty soon after filing bankruptcy, their credit scores have gone up. So you may think, well, there’s a statute of limitations that has run and I can’t get sued on these bad debts anymore. Well, that’s true, but the creditors can still report those bad debts to the credit bureaus and they will still show up on your credit scores that will drive those scores down.