Will filing bankruptcy ruin your credit?

After filing bankruptcy you have no outstanding debt and cannot file for another eight years.  In fact you look like a much better candidate for credit card companies after filing bankruptcy.

Recent studies say that over 90% of individuals after filing bankruptcy receive solicitation from a lender actually indicating that they new they had filed bankruptcy.  So remember, credit is your ability to borrow money, and that may actually improve after filing bankruptcy.

Buying a home after bankruptcy.

In determining weather or not to lend to a person after filing bankruptcy it’s important to understand what banks consider when determining whether or not to loan you money.  Probably the most important factor that they consider is your debt to income ratio, in other words, out much outstanding debt you have relative  to your income coming in.
Now generally a lender wants you to make a mortgage payment no greater than 30% of your gross monthly income.  So let’s put this in perspective, right now, calculate how much income compared to your monthy debt payments.  If it’s more then you don’t have any expendable income available to make a monthy mortgage payments, and therefore no lender is going to loan you that money.  Now after bankruptcy, you edge your way toward that 30%, and certainly over the next couple of years you may be able to do that.

Does bankruptcy give a negative perception?

Filing bankruptcy is a very serious subject.  Whether you pay your bills does not determine whether or not you're a good person.  We think that other factors like how you treat your family or what values are important to you are more important factors. 

Most of the time people file bankruptcy because of circumstances beyond their control.  In fact, statistics show that over 70% of all bankruptcies are due to loss of job, divorce, or medical problems that are uninsured.  So does that really make you a bad person?  Because things happen to you that are beyond your control?