Bankruptcy can be a good way to get rid of a lot of credit card debt or medical debt. But it will still have a bad impact on your credit. A Chapter 7 bankruptcy in Georgia and in other states can leave you with terrible credit for a minimum of 7 years. That may not seem like a bad thing compared to a lot of debt. But, think about the many ways that having bad credit can impact your life. If you have a bad credit score or a bankruptcy you won’t be able to do things like:
- Get credit to buy furniture
- Get a mortgage
- Buy a new car
- Rent a good apartment
- Rent a car
- Get a loan
You may even not be able to get a job because it is legal for employers to check your credit scare before hiring you. If you have a low credit score some employers will refuse to hire you. Now consider not being able to do any of those things for 7 years. Georgia bankruptcy laws, and laws in other states, don’t cover all debt. So even if you file you may still be left with debt that you have to pay and you’ll have bad credit too. Staying out of debt and managing your credit more effectively so that you don’t have to file for bankruptcy is better than filing for a Chapter 7 bankruptcy in Georgia or in other states.
The Most Common Credit Mistakes
Managing your credit isn’t that difficult. But many people don’t think that their credit is very important so they don’t work on keeping their credit score high. Avoid making these mistakes with your credit and you can avoid having to file bankruptcy.
Not Making Payments On Time
This is the biggest mistake that people make when it comes to their credit. And it’s one that is easy to avoid. Making your monthly payments on debt like credit cards and student loans every month can build your credit or sink your credit. But, making payments on time means paying them by the due date every single month. Even being a few days late can impact your credit score. To make sure that your payment are made on time every month try using automatic payments through your bank. That way the bank will automatically send the payment electronically on a day that you set and you’ll never miss a payment.
Not Taking Care Of Old Debt
Debt that has gone into collection or debt that is older is debt that most people ignore. But those old accounts can kill your credit score. No one likes dealing with accounts that are in collection because it means having to deal with debt collectors. Debt collectors can be pushy, rude, or downright abusive. But if you work out payment plans with debt collectors you can often pay off the debt for a fraction of the original debt. That will protect your credit and stop the calls from collection agents.
Not Using Credit Effectively
Having no credit can often cause you to have a bad credit score. The best way to make sure that you have enough credit to raise your credit score and avoid bankruptcy without having so much credit that you end up in debt is to pay off your credit cards each month. Use credit cards to buy groceries, gas and other essentials. Then pay off the cards totally at the end of the month. That will give your credit score a huge boost and keep you from having to file bankruptcy.