Why would it be better to declare bankruptcy than try to pay your debts?

Bankruptcy frees you from debt collection, but the headaches can linger for years. Debt settlement without bankruptcy can take more time but, if negotiated properly, can do far less damage to your credit.

Does a paid Judgement affect your credit?

Judgments are no longer factored into credit scores, though they are still public record and can still impact your ability to qualify for credit or loans. You should pay legitimate judgments and dispute inaccurate judgments to ensure these do not affect your finances unduly.

Is bankruptcy better than credit repair?

Credit repair rarely flushes every negative item from a credit report, but it is more efficient in the short term than filing for bankruptcy and waiting up to 10 years for a clean credit report. Bankruptcy is more efficient when it comes to quickly disposing of debt.

What happens if I just stop paying my debt?

If you don’t pay your credit card bill, expect to pay late fees, receive increased interest rates and incur damages to your credit score. If you continue to miss payments, your card can be frozen, your debt could be sold to a collection agency and the collector of your debt could sue you and have your wages garnished.

What happens to credit card debt when you file bankruptcy?

If a creditor gets a judgment against you and the debt is dischargeable in a Chapter 7 bankruptcy, filing for bankruptcy will wipe out a creditor’s ability to collect. Judgments, however, can create a lien on your property. And liens don’t go away in bankruptcy automatically.

What happens when you file bankruptcy on a judgement?

Filing for bankruptcy will discharge you from any personal liabilities including debts that you owe to creditors. However, it’s important to note that once a judgment been filed and a lien is placed on your property, bankruptcy will not be able to remove that lien.

When to choose debt settlement vs.bankruptcy?

Simply put, if you have a mountain of unmanageable debt and bankruptcy is not an option — you can’t qualify for bankruptcy, or you absolutely cannot bear the stigma — debt settlement could be your best option.

What happens to your credit when a judgement is passed?

Once a judgment has been passed by the court, this gives your creditor more power to use your property to settle your debts. To make matters worse, a judgment is in the public record so it will appear on your credit report, which can be damaging to your overall financial health.