How Will Debt Relief Affect My Credit?
New York Debt Relief Attorney Explores the Answer
When your costs of living start to overcome your monthly salary, debt will
soon follow if nothing is done about it. There are multiple debt relief
options an individual can pursue, and the said can be said about
businesses that fall into debt. How will these options affect credit scores, though?
Is it possible that debt relief is not worth the damage it could do to credit?
At the Law Offices of Simon Goldenberg, PLLC, our debt relief lawyer in
New York can help you learn your legal options when it comes to seeking
a way out of debt. Perhaps more importantly to some clients, our firm
can explain how your decision will affect your credit score. Call toll free
888.301.0584 to speak with our team directly.
Using a Payment Plan
If your debt has not become outright overwhelming, you may be able to use
a debt repayment plan to settle the matter.
In a typical payment plan, you must:
- Repay all or most of your debt
- Make all payments within a set amount of time
- Exhibit improved spending behaviors
- Set money aside each month into savings
If you do not break the terms of your agreement, the impact on your credit
score may be minimal. Becoming delinquent on your payments will trigger
a notification to consumer reporting agencies that will impact your credit
further. If given the chance, taking a payment plan and sticking to it
may be your best option if you are concerned heavily with your credit score.
Using Bankruptcy to Eliminate Debt
Bankruptcy is a completely legitimate way to seek
debt relief. No longer is it surrounded by a negative social stigma that was misplaced
from the beginning. For the most part, however, bankruptcy can put a noticeable
dent in a person’s credit score. This is caused by creditors initially
losing confidence in the filer’s financial control. Through dedication
and planning, it may be possible improve your credit after bankruptcy.
In some circumstances, a successful bankruptcy can actually increase a
person’s credit score. If the debt was overwhelming and questionable,
the discharge can cause a raise in credit, rather than the expected drop.
Keep in mind that this is a case-by-case type of solution.
Debt Relief Should Be a Priority
While it might be unnerving to know that seeking debt relief could impact,
possibly just temporarily so, your credit score, it is likely far worse
to do nothing at all. If you just continue to fall into debt without any
plan of fixing it, your credit will be dismantled all the same. Discover
what you should do next by
contacting our New York debt relief attorney and scheduling a
free case evaluation today.